The Iran conflict is causing the oil services industry to increase its cost assessments for projects due to rising shipping, fuel and security costs, which are affecting its Middle Eastern contract performance, Reuters reports citing executives at a conference in Abu Dhabi.

“What we are facing now with our contracts in the Middle East is that logistics costs have increased — sometimes threefold. Fuel costs have doubled, labour costs have increased 30 to 40 per cent,” says Alessandro Bernini, Chief Executive Officer of Italian engineering group Maire.

He adds that the cost jump is eating into margins of service companies, raising the cost of projects and ultimately translating into higher energy prices and inflation around the world.

Logistics have become a problem due to the difficulty of delivering equipment, says Alessandro Puliti, CEO of Italian energy contractor Saipem.

“We have been sitting outside Hormuz for months,” he tells the conference.