HOW THE MIDDLE EAST CONFLICT COULD RESHAPE TRAFFIC TECHNOLOGY

Road traffic technology, when operating successfully, is something of an ‘invisible conductor’. When it works, no-one really notices it… and yet the geopolitical flashpoint in the Middle East is increasingly dictating how smoothly those systems can function. The ongoing conflict is not just an energy crisis story, it is rapidly becoming a technology supply chain crisis story with profound impacts and implications for the road traffic sector.

At the heart of the disruption is oil. The Strait of Hormuz, the narrow maritime corridor between the Persian Gulf and the Gulf of Oman through which roughly 20% of the world’s oil supply flows, has been severely affected by the conflict. Shipping interruptions and attacks on infrastructure have curtailed supply and driven volatility in the energy markets. In early April 2026, the International Energy Agency warned that lost supply could surpass previous historic crises.

“Shipping interruptions and attacks on infrastructure have curtailed supply and driven volatility in the energy markets. In early April 2026, the International Energy Agency warned that lost supply could surpass previous historic crises”

FUELLING THE COST OF OIL
For road traffic technology, this matters more than it might first appear. The sector depends heavily on oil-derived products - from plastics in traffic signals and sensors to the petrochemicals embedded in circuit boards and cabling. As oil prices climb, so too do the costs of manufacturing these components. Prolonged disruption could keep oil above the current (24 April) price of $100 per barrel, amplifying inflationary pressures across industrial supply chains - the price of Brent Crude oil was listed as $72 a barrel on 27 February, the day before the conflict started.

The cost increases do not stop at raw materials. Energy is a foundational input in semiconductor manufacturing, which underpins nearly every aspect of intelligent traffic systems - from AI-powered traffic cameras to vehicle-to-infrastructure communication modules. Rising fuel and electricity costs are already pushing up production expenses for chipmakers, particularly in Asia, where facilities depend heavily on imported Middle Eastern energy. For municipalities investing in “smart city” upgrades, this translates directly into higher procurement costs and delayed deployments.

 

MOUNTING PRESSURE
The UK’s Road Surface Treatments Association (RSTA) says that since the start of the conflict the price of bitumen has risen by the best part of 40% at a time when local authorities across Europe are under increasing pressure to both repair their roads and do so at reduced costs.

“The UK’s Road Surface Treatments Association (RSTA) says that since the start of the conflict the price of bitumen has risen by the best part of 40% at a time when local authorities across Europe are under increasing pressure to both repair their roads and do so at reduced costs”

RSTA members are reportedly receiving notifications of cost increases from bitumen suppliers linked to oil prices, as well as notifications from quarrying organisations of increased prices linked to increased energy and processing costs. In addition, hauliers and plant hire companies are indicating rising fuel-related costs.

As a result, it may not be possible to honour original agreed contract prices, and that contract clauses could be triggered; linked to extraordinary events beyond their control (including war), which will impact on rates.

Some contractors and suppliers in the UK have warned that highway maintenance schemes could be impacted, with prices going up as a result of supply challenges and spiralling costs.

FURTHER CHALLENGES AHEAD
There are also risks of potential supply challenges which could also become an issue in the coming months, with reports of global oil supplies down 20% already.

The supply of solvents for surface treatments also remains volatile and unpredictable, which may result in extended lead times and increased material costs. This has the potential to impact on penetrative preservation systems.

Mike Hansford, Chief Executive of the RSTA, said:

“The news of rising costs of materials comes at an already challenging time for the industry, as highway authorities assess the damage to their road networks following one of the wettest winters on record. This is hugely challenging for our Association members, as suppliers pass on rising costs of materials.

"This follows the UK Government’s commitment to increased, longer-term funding -a commitment that has driven momentum in recent years in the use of surface treatments - helping to support a more resilient road network.

"At a time of rising costs of materials, and potential for supply challenges in the future, there has never been a greater time for use of low-cost surface treatments, to support the management of road network condition, in these challenging times. Especially roads in mid-life condition, already experiencing localised fails over the past months. These roads need to be sealed this summer if we are to avoid a repeat of the damage experienced, next winter.

“At a time of rising costs of materials, and potential for supply challenges in the future, there has never been a greater time for use of low-cost surface treatments, to support the management of road network condition, in these challenging times”

"Our Association members will be contacting their clients to discuss the impact the conflict is having on their costs, and to reassure them that any increases will be passed on at cost only. We ask that clients support contractors and suppliers through what is a difficult time for everyone in the highways sector.”

MAKING A LONG JOURNEY LONGER
Logistics, too, are under considerable strain. With shipping routes through the Gulf disrupted, cargo vessels are being rerouted around Africa, adding weeks to delivery times and significantly increasing freight costs. For the road traffic technology sector - where projects often depend on tightly coordinated supply chains - such bottlenecks can be crippling.

The automotive dimension adds another layer of complexity. Modern vehicles are increasingly integrated with road infrastructure through connected and autonomous systems. Yet the conflict in the Middle East is driving up costs across the automotive sector, from energy inputs to logistics and the aforementioned petrochemicals. As car manufacturers grapple with higher production costs and supply uncertainty, the rollout of vehicle-integrated traffic technologies may slow, weakening the broader ITS ecosystem.

As fuel prices rise, governments may prioritise investments in public transport and electrification, potentially accelerating demand for advanced traffic management systems. At the same time, constrained budgets - driven by inflation and economic slowdown - could limit the ability of cities to fund large-scale infrastructure upgrades. Indeed, central banks have already warned that the conflict represents a “substantial negative supply shock,” feeding inflation and dampening growth.

“Whilst bitumen supply is currently stable, spot market prices have increased significantly. And there is potential for further increases during May,” adds Mike Hansford.

“Fuel costs also remain high which impacts on transportation, and the availability and pricing of solvents continue to be volatile, which impacts specifically on penetrative preservation systems. The surface treatment season is now underway. Our Association members are progressing as normal where possible and maintaining continuity but remain mindful of how quickly circumstances could change. Ongoing market uncertainty continues to impact confidence and pricing, so we are keeping the situation under close review.”

“As fuel prices rise, governments may prioritise investments in public transport and electrification, potentially accelerating demand for advanced traffic management systems”

HOPE SENSITIVITY
There are, of course, scenarios in which the impact may ease. If the conflict de-escalates and shipping routes reopen, oil prices could stabilise, and supply chains can gradually recover. Markets have already shown sensitivity to such signals, with oil prices dipping on tentative hopes of resolution, yet even in this optimistic case, the episode may leave a lasting imprint, reinforcing a more cautious and diversified approach to sourcing.

For now, though, it is fair to say that the road ahead is uncertain. What is clear is that the road traffic technology sector - often perceived as a local, infrastructure-focused industry - is deeply entwined with global systems of energy, materials, and logistics. In an era where cities have an obligation to aspire to become smarter and more connected, the lesson is stark: the infrastructure of the future is only as resilient as the supply chains that currently sustain it.