Latvia Road Projects Threatened as Iran Conflict Drives Up Bitumen Costs
Road projects in Latvia are facing potential delays or cancellation due to a sharp increase in the price of bitumen, a key component in asphalt production. The price surge is directly linked to escalating oil prices stemming from heightened tensions and conflict involving Iran, according to representatives from VSIA “Latvijas valsts ceļi” (LVC), Latvia’s state road management company.
Bitumen Price Spike Linked to US-Iran Conflict
LVC reports that bitumen prices have risen by a quarter in just a few days, driven by the impact of the US-Iran conflict on global oil markets. The company anticipates further price increases are possible. As of March 9, 2026, Brent crude oil is trading at $103.54 per barrel, and WTI crude oil at $107.35 per barrel, representing a 15% increase [Britannica].
Tender Deadlines Extended, Project Implementation at Risk
To mitigate the impact of the volatile market, LVC will extend the submission deadlines for ongoing state road construction procurements. This will allow contractors to submit bids reflecting current market conditions. However, LVC acknowledges that some projects may ultimately be postponed or cancelled if construction costs turn into prohibitive. Indexation of existing contracts will too be considered if the bitumen market situation does not improve.
Broader Economic Implications
Economists are warning that rising fuel prices could persist for weeks or even months, even if the conflict resolves quickly. Damage to oil infrastructure and disruptions to logistics networks, coupled with increased risks to transportation, are expected to hinder a rapid restoration of oil supply [Britannica].
LVC’s Role in Latvia’s Road Network
Established in 2004, LVC is a state-owned company responsible for managing Latvia’s national highway network, which spans over 20,000 kilometers. The company also administers financing and procurement for state road projects [Latvijas Valsts ceļi].
Latvia’s Stance on Iran
Latvia continues to support European Union sanctions against Iran and emphasizes the need for Iran to fully cooperate with the International Atomic Energy Agency to ensure nuclear safety in the region. President Edgars Rinkēvičs has also reaffirmed Latvia’s solidarity with Israel and condemned terrorist attacks against its citizens [President of Latvia].
The 2026 Iran conflict, initiated on February 28, 2026, by the United States and Israel, has broader implications for global economies and infrastructure projects, as evidenced by the challenges facing Latvia’s road construction plans [Britannica].