Oil services firms face major cost pressure from Iran crisis, executives say
XLE•Executives said the Iran conflict has raised shipping, fuel, labour and security costs for oil services projects in the Middle East. One executive cited logistics costs up as much as threefold, fuel costs doubled and labour costs up 30% to 40%.
1. Costs rise in Middle East
Executives at a conference in Abu Dhabi said the Iran conflict is increasing costs for oil services projects and affecting contract performance. Threats to shipping through the Strait of Hormuz have made equipment deliveries difficult, while infrastructure damage and staff evacuations have added pressure.
2. Companies absorb increases
Maire CEO Alessandro Bernini said logistics costs had increased “sometimes threefold,” fuel costs had doubled and labour costs had risen 30% to 40%. Saipem CEO Alessandro Puliti said logistics were a problem and that the company had been waiting outside Hormuz for months. NESR CEO Sherif Foda said shipping and logistics costs had risen as materials were stored longer to cover possible disruptions, and that companies were absorbing the increases.
