L&T Sees Post-War Opportunities in Middle East Alternative Energy Sector

Larsen and Toubro (L&T) Sees Opportunities in Middle East Amid Push for Faster Project Execution and Diversification of Energy Supply Routes

Overview

Infrastructure giant Larsen and Toubro (L&T) expects new opportunities to emerge in the Middle East, driven by a push for faster project execution and diversification of energy supply routes. The company's clients in the region are increasingly accelerating ongoing projects to bring capacities online sooner, while also exploring the addition of new capacities.

Middle East Operations

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

As of 2026, the Middle East accounts for 36% of L&T's total order book. The company's operations focus heavily on energy transition, power infrastructure, and hydrocarbon projects (offshore and onshore), particularly in Saudi Arabia, the UAE, Qatar, and Kuwait. L&T is a major player in the Middle East's energy transition, securing multi-billion dollar contracts for solar power, green hydrogen, and carbon capture.

Diversification of Energy Supply Routes

The region will start evaluating alternative routes more strategically to move oil and gas, reducing prolonged dependency on the Strait of Hormuz (SoH). This could open up new opportunities for L&T and other infrastructure companies. The company expects significant traction in rebuilding activities once the conflict settles, with governments likely requiring multiple contractors for these efforts.

Stability of Operations

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

L&T's operations in the region are largely stable, with 95% of its 100 sites functioning as "business as usual" without disruption. Only approximately 5% of sites—primarily those near military bases or involving specific water projects—have been suspended voluntarily or at the request of customers.

Raw Materials

To resolve potential shortages in raw materials, the company is working with customers to use alternative ports in Oman and the Red Sea and shifting to road transportation.

Energy Transition

Amid the jump in crude prices, triggered by the war, there could be a renewed focus on energy transition. L&T is well-positioned to capitalize on this trend, with its experience in solar power, green hydrogen, and carbon capture.

Iran as a New Market

Separately, Subramanian Sarma, Deputy Managing Director & President, L&T, flagged Iran as a massive "new market" where the opportunities for Indian companies would be "enormous", if the current sanctions are lifted.