If you expected diggers to stop digging across the Gulf after hostilities began on 28 February, that hasn’t happened. Not yet.

Across the GCC, construction sites are largely operating as normal. According to MEED, there are 6,738 live projects under execution with a combined value of $951bn. That’s not a market that shuts down overnight.

Contractors in the UAE, Saudi Arabia and Qatar say most of their sites are open, staffed and pushing ahead. In Dubai, a handful of projects paused work – usually because they were close to security incidents or authorities asked them to stop. But those cases are the exception, not the rule.

Even oil and gas projects in Saudi Arabia and Qatar – the kind you’d assume would be first in line for disruption – are continuing.

So, from the outside, it looks steady. But scratch the surface and you’ll find a lot of quiet risk management happening behind the scenes.

Not force majeure but definitely ‘take notes’

Most contractors don’t see this as force majeure. Instead, they’re treating it as a disruption that needs careful documentation. That means logging delays. Tracking material price changes. Keeping written records of every instruction and shipment delay.

If you’ve worked on projects in the region, you’ll know this drill. When uncertainty creeps in, paperwork multiplies.

Right now, many contractors are taking a pragmatic approach: keep building, support the client, don’t escalate prematurely. But everyone is watching the numbers.

Because the real pressure point may not be what’s happening on site – it’s what’s happening at sea.

The Strait problem

International shipping through the Strait of Hormuz has effectively stopped. That’s not a small detail. A huge portion of the region’s materials – specialist equipment, steel components, MEP systems – flows through that corridor.

If shipments stall for weeks, projects won’t grind to a halt overnight. Most major sites carry buffer stock. But stretch it long enough? You’ll start to see sequencing issues. Then programme slippage. Then cost claims.

And let’s talk oil prices. Yes, higher oil can boost state revenues in producing countries. But for contractors? Higher fuel costs mean more expensive transport, more expensive manufacturing, more expensive everything. Margins in Gulf contracting are already tight. There isn’t much fat to absorb prolonged inflation.

Awards: freeze or fast-forward?

Here’s where it gets interesting.

Some in the market worry that uncertainty will slow new contract awards. That’s a reasonable fear. Big developers don’t love volatility.

But others are seeing the opposite. A few Dubai-based contractors have signed deals that were sitting in limbo. The logic is simple: lock in contractors now before prices rise further. Secure capacity before it tightens.

We’ve seen this behaviour before in inflationary cycles. When clients believe costs are heading north, they move quickly. Delay can be more expensive than action.

So which way will it go? Probably both. Strategic infrastructure may accelerate. Discretionary real estate could cool.

A shift in priorities?

Longer term, we may see governments tilt spending towards defence-related assets and strategic infrastructure – power, water, energy security. Hardening critical facilities could also become more common. Think data centres designed with added protective measures, maybe even partially underground.

On the flip side, tourism and luxury real estate could face perception challenges if regional security concerns linger. And tourism is a cornerstone of diversification strategies across the GCC. That’s not a small variable.

So where does that leave us?

For now, cranes are still turning. Concrete is still being poured. The GCC construction machine hasn’t stalled.

But the industry isn’t relaxed. Contractors are building – and hedging. Documenting. Running cost scenarios. Watching shipping routes. Watching oil.

The first phase of this story is about resilience.

The second phase – if supply chains tighten and inflation bites the global outlook – will be about who priced risk properly, who managed contracts tightly, and who moved fast when it mattered.

We’re not there yet.

But everyone can see it on the horizon.