What The Iran War Means For Asphalt Contractors This Paving Season

It's safe to say that the beginning of asphalt's busy season will be anything but a clean start. This isn't the first time that asphalt contractors, producers and pavers alike, have faced a summer of inflated tonnage prices due to global market disruption of oil. However, signs indicate that it is already much more dire.

On February 28 the United States and Israel began it's campaign against Iran, and, in response, Tehran closed the Strait of Hormuz. Crucially, that narrow waterway sees roughly twenty percent of the entire world's daily oil supply pass through it. Since then, the International Energy Agency (IEA) called the resulting disruption as the largest in the history of the global oil market. 

Brent crude, which hovered around $60 before the conflict began, is now holding fairly steady above $100 per barrel, but has already seen spikes of $120+ during the past month. One bright spot, for now, is that crude futures for September delivery are stabilizing between $75-$80 as of the writing of this article.

Whether or not that optimistic outlook holds true is another matter.

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What The Data Shows Right Now

To get the most reliable and publicly available data on domestic liquid asphalt pricing comes from state DOT pricing indexes, which survey regional supplier prices on a monthly basis. The Kansas DOT Asphalt Adjustment Price Index and the Georgia DOT asphalt Cement Price Index both published March 2026 figures, but, so far, neither reflects the war's disruption.

The reason for that lag is because state DOT indexes survey prior-month transactions and post the results several weeks after that survey is taken. During times where the prices are moving rapidly, the indexes have historically trailed the actual market by anywhere from thirty up to ninety days. For those contractors who operate in the spot-market, those purchasing binder without long-term supplier agreements (or DOT escalation clause protections) feel the shock well before the index moves. But the index always catches up.

As of March 2026, the Kansas PG 64-22 index stands at $496 per short ton. The Georgia index stands at $559 per short ton. And both of those figures reflect the pre-war marketplace. 

Looking At The 2022 Playbook For Answers

The best available comparison to our current situation to predict what might be about to happen is the Russia-Ukraine war, which began eerily near to the same time as the current conflict: February 24, 2022. That conflict removed approximately ten percent of global oil supply from the market, primarily through sanctions rather than physical unavailability, i.e. production capacity reduction or stockpile losses. A month later, Brent crude jumped up to $139 per barrel in March 2022, similar to our current environment now.

Thanks to the excellent record keeping by the Kansas DOT index, we can see a clear story of what happened next for asphalt contractors. In January 2022, the index showed $496 per short ton, but by August, in the dead-heat of summer, it had ballooned to it's peak of $774 per short ton. That was a 56.1% increase over eight months. Many contractors will likely recall that it stayed fairly high (above $600 per ton) for most of the entirety of 2023 before gradually coming down.

That fifty-six percent increase was relative to the ten percent in supply disruption. The 2026 disruption is already twice the size by every available measure. Even more concerning, there are currently no apparent, viable off-ramps to the violence, nor any seemingly on the horizon.

A Larger Shock, No Safety Valve

One critical, structural difference between the 2022 situation and the 2026 scenario, is not just the percentage of supply lost, but the absence of anything positioned to replace it.

During the start of the Russia-Ukraine war, the global oil market rerouted supply, drew down reserves, and leaned on spare capacity which was held primarily by Saudi Arabia and the United Arab Emirates (UAE). That mechanism absorbed a crucial portion of the market shock. Binder prices still rose, but there was that cushion. 

Now, in 2026, the Strait of Hormuz closure blocks those partnerships our of the global market place, along with everyone else. The consulting firm Rapidan Energy (via CNBC) described the situation bluntly:

"The conflict has not only taken offline a historically high share of global supply, it has simultaneously disrupted the primary holders of spare capacity. The result is a market with no meaningful cushion. There is no swing producer positioned to step in."

A second dynamic that further compounds the supply problem that may directly impact the asphalt industry is what happens after crude spikes. The refineries convert their production units away from heavy residual fractions, which is where asphalt binder comes from, toward higher-margin light fuels like gasoline and diesel. 

Marathon petroleum executed this precise maneuver at its Martinez, California facility in 2022. That cut asphalt output by forty percent after upgrading for light crude processing. This type of refinery behavior could happen again, especially as your average American feels the acute pain at the pump. The result will squeeze the binder supply market that operates independently of crude price movement.

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Nothing Is Certain: A Range Of Possibilities 

Any meaningful projection of where binder prices might go this season requires transparency about what we do know, and what we don't. The following scenarios scale the verified 2022 price movements proportionally against the current magnitude of disruption. 

These are editorial estimates, not market forecasts, and actual prices will depend heavily on the duration of the Iran-U.S. conflict, reserve deployments, domestic production response, and refinery behavior. 

SCENARIO ESTIMATES (PG 64-22, per short ton, unmodified)

For context: September crude futures currently trading around $80 per barrel suggests that markets anticipate a relatively short disruption. If that timeline holds, the conservative scenario becomes the most likely result, and the financial impact for contractors would more closely resemble 2022. However, even that, as a best case scenario, brings to mind painful memories. If the conflict extends beyond Q2, the math will quickly change, and significantly. 

What Contractors Should Watch For

The March 2026 DOT indexes represent the last clean pre-war data point. April indexes, due in approximately four-to-six weeks, will be the first to signal how the reported disruptions are transmitting into the supplier pricing. 

Contractors bidding work that will be completed later this summer or early fall, are effectively bidding into an uncertain material cost environment. This means that any escalation clause protections, wherever available, have some real value for contractors. 

Recycled asphalt pavement (RAP) may also become a more compelling financial argument if and/or when virgin binder prices start rising. Currently, only twenty-three states permit RAP content above twenty-five percent in surface mixes. Contractors in states with more flexible RAP specs might have the slightest bit of wiggle-room there to take advantage of when possible.

One final data point of note comes from the Bureau of Labor statistics (BLS) and the compiled producer price index (PPI). During the Russia-Ukraine disruption, asphalt at the refinery gate jumped 43.5 percent in 2022. By the time that shock reverberated down the supply chain and reached paving contractors as processed mix, the PPI for paving mixtures registered a 16.7 percent increase for the same year. 

The supply chain absorbed roughly two-thirds of the raw price movement before it hit the jobsite. However, that buffer held the way it did in 2022 because it was a largely sanctions-driven market event, as noted earlier. 

The BLS PPI data for asphalt paving cement was most recently updated in January 2026 at an index value of 326.6, which was a significant leap from the December 2025 figure 269.5. What that means practically is that the refinery-gate price for asphalt is likely moving harder and faster right now than any DOT index or processed-mix PPI will show for several months. 

Contractors bidding work today are pricing into a market where the full force of the shock has not yet transmitted downstream. The April indexes will likely signal what kind of summer awaits us.

_{Note on the projection scenarios in this article: The conservative, moderate, and aggressive price scenarios are the editors' estimates derived by proportional scaling of the verified 2022 Kansas DOT index response (56.1% increase for ~10% supply disruption) against the current disruption magnitude (~20% supply loss, IEA-verified). They are not market forecasts. No proprietary commodity pricing data or subscription market intelligence was used in constructing these estimates. The methodology is fully transparent and intended to give contractors a reasonable planning range, not a prediction.}