May marks the midpoint of 2026’s second quarter and, as of this writing, we enter the fifth week of engagement in the Iranian war. The blockage of the Strait of Hormuz continues to disrupt the energy supply chain, resulting in price escalation that has reached new highs under this administration. 

As of this writing, WTI is at $111.54/barrel and Brent is at $109.03/barrel — the first time in 15 years that WTI is higher than Brent. WTI is currently more deliverable due to the disruption of supply through the Strait of Hormuz, so traders bid it up. Buyers prefer barrels that avoid chokepoints.

Fuel prices account for 50% to 60% of the total operating cost of sending goods by ship, according to Patrick Penfield, professor of supply chain practice at Syracuse University, so higher fuel prices have a substantial effect on the industry.

“When fuel prices start to go up, everything starts to slow down,” Penfield notes. “So, your ships slow down, your trucks slow down. People are likely to ship things via air. And it really causes a drag on the economy when fuel prices go up.”

The war’s duration, along with the degree of damage to the region’s production infrastructure, will affect oil prices. The opening of the Strait of Hormuz will free the movement of oil tankers, as 20% of the global petroleum consumption and 25% to 27% of all seaborne oil trade flows through the Strait. This will have a significant impact on pricing.

Some offshore suppliers of carbon steel seamless pipe are now quoting delivery times into the first quarter of 2027. In addition, it is reported that power companies in certain countries have begun limiting energy usage to only 40% of normal levels. 

There are also early indications of shipping container shortages and increasing costs for container shipments to the United States, a precursor to supply chain disruptions.

Offshore suppliers are firming their pricing, and shortages are beginning to emerge for many segments of the PVF industry, including carbon steel butt-welding fittings and forged steel flanges.

As of this writing, pricing and the availability of carbon steel butt-welding pipe fittings and forged steel flanges remain stable. However, with demand at record-breaking levels, coupled with increasing transportation costs, price increases and shortages are on the horizon.

Close contact with your manufacturers or suppliers is essential to avoid being caught off guard by price increases and product shortages.

Construction project news

•  Fluor Corp.’s Advanced Technologies has been selected to provide early engineering, master planning and reconstruction services for a planned 480 MW data center campus located in central Kentucky, with an estimated cost of $3 billion to $4 billion.

Flour signed a limited notice to proceed with TeraWulf, a cryptocurrency and data infrastructure company planning to redevelop and retire the Century Aluminum smelter in Hawesville, Kentucky, as a data center. 

 Construction on the 790-acre tract is scheduled to start later this year, with completion set for 2027.

•  A massive 10 GW data center, along with 10 GW of power generation capacity (9.2 GW of power from natural gas generation), is moving forward on the site of the former Portsmouth Gaseous Diffusion Plant, a long-shuttered uranium enrichment plant in Piketon, Ohio, near Columbus.

Bechtel and Kiewit Corp. were selected for the project, named The PORTS Technology Campus. Construction is scheduled to start this year on the 3,700-acre site owned by the U.S. Department of Energy.

The project is part of a U.S.-Japanese strategic trade and investment agreement, which includes approximately $33 billion in Japanese funding.

•  Constellation Energy announced a $3.9 billion capital spending plan for this year as interest increases in the company’s clean power output via its largest nuclear fleet. Constellation acquired Calpine Corp, which operates geothermal plants and multiple natural-gas-fired plants, in January. 

•  Both nuclear and natural-gas-fired power are expected to be big winners in the rapid growth in U.S. power demand driven by artificial intelligence data centers.

Projects scheduled for this year include the restart of Unit 1 at the former Three Mile Island nuclear plant in Pennsylvania, now renamed the Crane Clean Energy Center.

The unit’s restart is scheduled to begin operations in 2027.

•  Constellation Energy also struck a deal with Meta Platforms for the entire output from the Clinton Clean Energy Center in Illinois. Included in the agreement is a 30-MW upgrade project, boosting the plant’s output to 1,121 MW. 

Another project slated for this year is the installation of eight natural-gas-fired, simple-cycle units next to its Wolf Hollow 2 Plant in Granbury, Texas. The units are to be used as peaking units in times of heavy power demand.

•  Meta Platforms reached an agreement with Entergy Louisiana to fund a new energy infrastructure to support its planned $27 billion data center in Richland Parish. 

Under the agreement, Meta will fund seven new natural-gas-fired power plants totaling more than 5 GW, along with approximately 240 miles of 500 kW transmission lines.

•  Early site work began with the elected team of Turner Construction, DPR Construction and Mortenson to build the 4-million-square-foot Hyperion data center campus. Peak onsite employment is expected to exceed 5,000 workers.

•  Amazon is preparing to break ground on a $12 billion network of data center campuses in northwest Louisiana. The multisite project spans the Caddo and Bossier parishes, marking the company’s first footprint in Louisiana.

The project will be delivered in partnership with STACK Infrastructure, which is serving as developer, owner and contractor for the campus. STACK estimates the program will generate 1,500 temporary construction jobs, drawn from local contractors and skilled trades across electrical, mechanical, HVAC and related fields.

Construction hiring slows in February

The latest statistics released by the U.S. Bureau of Labor Statistics indicated that jobs in the construction industry declined by 53,000 since February. 

“Construction hiring fell to the slowest rate on record in February,” says Anirban Basu, chief economist at Associated Builders and Contractors. “At the same time, contractors remained reluctant to lay off workers while employees were even more reluctant to leave.”

Macrina Wilkens, director of market insights at the Associated General Contractors of America, remarks that, “Contractors may be more reluctant to add workers amid uncertainty about how much they will pay for construction materials and the demand for certain types of construction projects.” 

She adds that “even with the monthly drop, construction employment has grown at a faster rate during the past year than the broader economy.”

With all that said, the demand for skilled labor persists due to the graying of its workforce and the reluctance of young workers to enter the construction trades.

At the Mechanical Contractors Association of America’s March convention in Phoenix, United Association General President Mark McManus outlined the union’s commitment to providing educational programs and its successes in attracting new workers into the trades.

PVF Roundtable networking 

The PVF Roundtable (PVFRT) recognizes the industry’s need to develop a young, skilled labor force. It is actively funding PVF-oriented trade school scholarships through the PVFRT Charitable Foundation, awarding nearly $3 million to date. 

The primary funding for the PVFRT Charitable Foundation comes from the PVFRT annual golf tournament and the annual TroutBlast. The Weldbend Corp., Ferguson Industrial and MRC Global are key sponsors of these events.

The PVF Roundtable continues to serve as a vital hub for industry networking, education and advocacy. Recent and upcoming events reflect the sector’s commitment to collaboration and innovation.

Networking meetings are now, more than ever, essential for you, your associates and clients to share information, discuss pertinent issues, meet new contacts, develop long-lasting friendships and pursue new opportunities in the industry.