Dubai, United Arab Emirates — March 9, 2026: Monday morning started with a bang. Oil prices rose above $100, to $119 per barrel overnight, and Wall Street reacted quickly, with the Dow Jones Industrial Average plummeting more than 800 points on the move.
Stagflation, the deadly combination of rising prices and slowing growth, is no longer just a hot topic. Balance sheets, boardrooms, and employment sites across America are in shambles.
For those in the construction industry, energy shocks have implications far beyond the pumps.
Energy stocks: the only green in a sea of red
Today, in a market where nearly every sector was in the red, the S&P 500 energy sector was alone in positive territory.
While cruise lines fell more than 7% and airlines fell more than 6%, oil majors like ExxonMobil (XOM) and Chevron (CVX) held steady and in some cases rose.
This is the definitive sector rotation for 2026. Energy stocks are up about 24% since the beginning of the year, while the S&P 500 composite index has barely moved. The difference is now accelerating.
The trigger was the Middle East conflict over Iran. The US and Israeli attack on Iran on February 28 triggered a retaliatory closure of the Strait of Hormuz, through which about one-fifth of the world’s oil normally flows.
Markets are pricing in long-term supply disruptions as Iraq, the United Arab Emirates and Kuwait cut production amid shipment backlogs, and Iranian forces threaten to attack energy facilities in the region.
From the oil field to the job site: Impact on the construction industry
For construction professionals, the oil shock is not an abstract financial event. It’s rising material costs, fuel budget crises, and bidding woes, all happening at the same time. Diesel powers excavators, cranes, and delivery trucks.
Petrochemicals supply asphalt, roofing, sealants and PVC piping. If oil prices rise by 50% in a matter of weeks, those input costs won’t have to wait until the next contract review.
The UK construction industry is already feeling the strain. The UK construction industry has suffered its longest contraction since the global financial crisis, according to data released last week, according to the Purchasing Managers Index.
Although U.S. markets are becoming more resilient, the warning signs are all set, including weak job creation, rising borrowing costs, and a fuel shock that threatens to push consumer prices and interest rates higher further.
The stagflation trap and its implications for interest rates
The word on every trader’s lips today is stagflation, low growth combined with rising inflation. Last Friday’s jobs report showed that U.S. employers cut more jobs than they created, a number that would normally prompt the Federal Reserve to cut interest rates.
But with oil prices above $100, cutting interest rates risks adding fuel to the fire of inflation. The Fed is in trouble, and the construction industry is sensitive to what happens next.
Higher interest rates make it more expensive to finance commercial and residential projects. Developers begin to withdraw.
Owners defer capital expenditures. Contractors squeeze profits with fixed price bids that no longer reflect reality. If the economy weakens and the Fed leaves interest rates unchanged to combat inflation, construction activity is likely to feel the pinch until the second half of 2026.
A glimmer of hope: Spending on energy infrastructure
Not all energy talk is bad for builders. Analysts currently expect more than $650 billion in capital spending across energy, power markets, data center cooling infrastructure and industrial construction in 2026 alone, a figure roughly equal to Sweden’s GDP.
Companies involved in power infrastructure and electrical equipment are seeing their orders extended to 2030.
For contractors involved in energy facility construction, pipeline construction, or industrial construction, demand is strong and pricing power is real.
The same geopolitical shocks that cause fuel prices to rise are also driving investment in domestic energy security.
Liquefied natural gas terminals, refinery expansions, and power grid modernization are all construction-intensive projects, and the political will to fund them is stronger than in recent years.
Stocks to watch this week
ExxonMobil (XOM) — Exxon’s fourth-quarter 2025 revenue beat expectations at $6.5 billion on revenue of $82.3 billion, and analysts expect the 2026 number to rise significantly given trends in oil prices. Exxon remains highly leveraged among the majors to take advantage of rising oil prices.
Chevron (CVX) — Chevron has shown that its vertically integrated model across U.S. shale, LNG and downstream operations allows it to cover capital expenditures and dividends at Brent prices below $50. At over $100, its cash generation is extraordinary. Resilient holds in energy-driven portfolios.
Natural Resources Canada (CNQ) — For those paying attention to the international name, CNQ reported fourth-quarter production of 1.66 million barrels of oil equivalent per day, an increase of almost 13% year-over-year, and raised its production forecast for 2026. Adjusted profits were significantly higher than expected.
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Yvonne Adhiambo is a construction industry journalist and content specialist with a keen eye for emerging trends, technologies and innovations shaping Africa’s built environment. With years of experience covering infrastructure projects, equipment, and engineering solutions, Yvonne provides in-depth analysis and practical insight to contractors, engineers, and industry stakeholders. She is passionate about highlighting sustainable construction practices and the latest advances that promote efficiency and safety on the job site.
