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What you Need to know about the Impact of Russian Sanctions Within the Construction World

The Russian-Ukrainian conflict, coupled with high inflation levels in the U.S., is affecting more than just gas prices. Due to the Russian sanctions put in place, many of the previously solved supply chain issues are on the rise again, after a brief dip post-pandemic. Besides the obvious skyrocketing prices of gasoline, many petroleum-based products are also going to be costing consumers. You may be wondering— how does this affect the construction world? Here’s what you need to know about the impact of Russian sanctions on petroleum-based products in the construction industry.

A recent NBC News article states, “Oil is part of many building materials, and furnishings, including asphalt roof shingles, plywood and shag carpet.” The article goes on to say if you are buying products such as furniture, insulation, epoxies, or adhesives, you can also expect prices to increase. These price increases are affecting the home building and the broader spectrum of the Construction industry as well. When you combine the price increase with the supply issues for crucial components of the building process, the overall cost and efficiency of projects are bound to be affected.

Among the different petroleum-based construction products may be impacted by Russian sanctions include:

  • Roofing

  • Insulation

  • PVC pipe

  • Plywood

  • Metal

  • Cement

An article by Business of the Home states they believe the ban on exports of wood and forestry supplies could pose a risk to the home-building side of construction, specifically. With the reduced import of high-demand materials, many will be experiencing a delayed process of building as contractors and construction companies wait on materials.

The United States, like many other countries across the world, are largely impacted by this conflict due to their heavy reliance on Russia for a sizable amount of oil and gas. TIME writes, “On average, the E.U. relies on Russia for 35% of its natural gas—though some countries are more dependent than others.” The Russian sanctions put in place will make it much more difficult for countries to obtain petroleum-based products. This reliance causes U.S. businesses to suffer when it comes to purchasing fair-priced goods and obtaining them in a timely fashion. So many vital materials in the construction industry are petroleum-based which is why this industry is so affected.

Part of the renewed disruption of the Russian/Ukrainian supply chain is the lack of transportation. Vinson & Elkins LLP shares “the increased price of oil and gas is likely also to affect the costs of production as well as transportation of equipment, materials and project parts” Shipping, by way of both sea and air, is suffering due to the military blockade of the Black Sea, a key transit point and closed airspace. This causes supply chain issues on our end as we are unable to receive certain products in a timely manner or even at all, for that matter. This is just another piece of the puzzle when it comes to understanding the challenges and issues the conflict between Russia and Ukraine have caused within the construction industry.

So, you may be thinking, “How will this affect business with Honor Construction?” We assure you we are doing everything we can to offer our high-quality services at a competitive price. As the supply and labor prices fluctuate, leaving certain products unavailable or back-ordered, we will do our best to work with you to make your design and ideas come to life.

We are aware of the current disruption in the global supply chain, as well as the increase in prices for many relevant materials. We strive to remain informed and we will pass along relevant information to our clients as we work together to continue providing our top-notch construction services to each of our customers.


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