47 SECTION 3 VALUE CREATION INTEGRATED ANNUAL REPORT 2025 GEOPOLITICAL VOLATILITY AND MIDDLE EAST ENERGY MARKET DYNAMICS The Middle East remained one of Wasco’s key regional markets in 2025, supported by the Group’s operational presence in Qatar and Dubai. The region also experienced escalating geopolitical volatility during the year, contributing to sustained uncertainty across global energy markets. Hostilities between Israel and Iran that began in June 2025 have since expanded to involve the United States and other regional actors. The conflict heightened risks around the Strait of Hormuz, through which approximately one-fifth of global petroleum liquids consumption normally transits.9 In early 2026, the withdrawal of war-risk insurance for vessels transiting the Strait of Hormuz prompted shipowners and charterers to suspend movements, sharply reducing maritime energy trade through the corridor despite the Strait remaining technically open.10 These developments highlight the operational and logistical risks that infrastructure contractors must manage when executing projects across the region. • Execution continuity was maintained, with project delivery continuing according to schedule through the Group’s global fabrication network despite regional volatility affecting Middle East markets. • Portfolio diversification was strengthened, with active projects across Europe, Southeast Asia, and West Africa, reducing concentration risk while positioning the Group to capture infrastructure opportunities as energy investment shifts across global supply regions. • Operational preparedness was reinforced, with active monitoring of regional developments, logistics corridors, and supplier networks to manage potential disruptions affecting Middle East operations. These measures position the Group to navigate geopolitical uncertainty while continuing to support long-term energy infrastructure development across global markets. Market Impact: Wasco’s Responses: 9 U.S. Energy Information Administration (EIA), World Oil Transit Chokepoints. 10 Reuters reporting on shipping insurance withdrawal and Strait of Hormuz disruption, March 2026. 6 KEY MARKET TRENDS
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