Italian contracting giant Saipem is maintaining a positive outlook for 2026, despite the ongoing Middle East crisis, and is positioning itself for potential repair work on facilities damaged by Iranian attacks. CEO Alessandro Puliti stated that the company's Middle East activities are experiencing only "limited disruption" and that the full-year guidance remains unchanged, based on four key pillars: steady first-quarter performance, progress on Middle East project execution, supportive client attitudes, and an expectation that the Strait of Hormuz issue will normalize within weeks.

Current Operations and Client Resilience

Puliti emphasized that clients in the region remain resilient and focused on increasing activity and achieving production capacity targets. Apart from some postponed meetings and travel difficulties, commercial activity is proceeding normally. In the medium to long term, the crisis is expected to reinforce the already positive outlook for global energy investment, in addition to requiring investments to repair certain energy infrastructure in the Middle East.

Logistical and Inflationary Risks

Puliti acknowledged that a prolonged closure of the Strait of Hormuz could impact the delivery of critical components for Saipem's global projects and disrupt worldwide logistics, potentially driving up inflation. However, he noted that Saipem's exposure is limited because its activities rely on heavy transportation vessels and barges, not port logistics. The company can also leverage its facilities in Karimun, Indonesia, if interim transit is needed. Regarding inflation, Puliti stated that recent contracts include provisions to handle increased inflation, and most of Saipem's 2026 Gulf activities are supported by materials purchased in previous years. He cautioned that impacts would begin to be seen if the Strait of Hormuz does not reopen by late May or July, as the strait is crucial for moving equipment out of the Persian Gulf and for importing jackets and decks for two Saipem-managed projects in Qatar scheduled for June or July.

Opportunities for Repair Work

Puliti sees opportunities for Saipem to bid for repair work at onshore oil and gas facilities in Saudi Arabia and elsewhere that have been damaged by Iranian strikes. He highlighted that Saipem built several of these facilities in the past, giving the company an advantage in knowledge and understanding of the plants. Since Saipem is already mobilized in the region on other construction projects, it can easily add repair work to its current activity. Puliti stated that the company will be fair in pricing repair work, expecting normal margins, and emphasized that Saipem has a long-term relationship with its clients based on fairness. According to consultancy Rystad Energy, repair costs for energy-related infrastructure damages from the Middle East war could range between $34 billion and $58 billion, with oil and gas facilities likely among the most affected.