The conflict conducted by the US and Israel against Iran is significantly exacerbating the existing structural crisis within German industry. Production disruptions in the Persian Gulf—affecting crude oil, natural gas, and other strategically vital raw materials such as helium—have triggered global price surges and heightened supply-chain risks.

This volatility is hitting German industry with particular severity due to its heavy reliance on the import of these commodities. While business associations warn of an impending industrial stagnation, the number of corporate bankruptcies in Germany has reached its highest level since the 2009 financial crisis.

The federal government recently attempted to diversify Germany’s energy imports and reduce its rapidly growing dependence on liquefied natural gas (LNG) from the US. Those efforts are now being hindered by the consequences of the US-led military campaign.

While energy-intensive industries remain under intense pressure, commodity firms and financial actors are benefiting from the price spikes. Companies profiting from the increased utilization of renewable and nuclear energy also anticipate a rise in sales.

Industry in free fall

According to reports from German Foreign Policy, the Federation of German Industries (BDI) does not expect any growth in industrial production this year as a direct consequence of the war with Iran.

BDI President Peter Leibinger, speaking recently at the opening of the Hannover Messe, stated that stagnation is the best-case scenario. Industrial production remains significantly below previous levels, with capacity utilization currently at just 78%.

Concurrently, procurement prices have risen more sharply than at any time since November 2022, with the increase being even more pronounced in the industrial sector. Companies are passing these elevated costs directly to consumers; service providers and manufacturing firms have raised prices to levels not seen in 35 and 39 months, respectively.

In addition to stagnation and mounting inflationary pressure, corporate insolvencies are on the rise. The Halle Institute for Economic Research (IWH) reported a total of 4,573 bankruptcy cases between January and March 2026. This represents the highest figure recorded since the third quarter of 2005. Insolvencies among partnerships and corporations are now exceeding the levels observed during the 2009 financial crisis.

Gulf supply chains critical for Germany

Disruptions in global supply chains are a primary driver of the crisis. In mid-March, a gas-to-liquids plant in Qatar involving Shell and an LNG production facility in which ExxonMobil holds a stake were struck by Iranian drones.

The Ras Laffan terminals account for approximately 20% of global LNG exports and roughly 40% of the world’s exported helium. Following the drone strikes, LNG production and the associated helium extraction were forced to halt.

Qatar’s primary helium markets are the EU (33%), China (29%), and Southeast Asia (31%). The EU relies on Qatar for approximately 40% of its helium requirements. The EU has classified helium as a critical raw material, as it is indispensable for the electronics industry (semiconductor manufacturing), cryogenics, and the aerospace sector.

Beyond Qatar and Iran, production was also affected in Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates (UAE), and Iraq. In the UAE, the main processing facility at the Habshan gas field suffered severe damage, necessitating a temporary total shutdown. In mid-April, the company announced that damage assessments were still ongoing.

In Saudi Arabia, the world’s largest processing and export facility for LNG components was damaged. Saudi Aramco produces ethane, propane, and butane at this site. These products are currently unavailable on global markets, a development that is negatively impacting German industry, among others.

Structural crisis deepens

As Markus Steilemann, President of the German Chemical Industry Association (VCI), recently warned, the looming resource scarcity on global markets will accelerate a trend that has been predictable for decades: the continuous decline of the German chemical industry, which is heavily dependent on fossil raw materials.

Steilemann expects the war in Iran to lead to significant shortages within the sector. According to the VCI president’s assessment, the full impact of the crisis has yet to be felt, even if the conflict in the Middle East does not escalate further. This applies to consumer-facing sectors as well, such as the availability of jet fuel.

Furthermore, the war threatens to undermine Germany’s efforts to diversify its energy supply. In January, the Institute for Energy Economics and Financial Analysis (IEEFA) predicted that the US share of total EU LNG imports could reach 80% by 2030.

A contributing factor was the European Commission’s commitment in late July 2025 to purchase $750 billion worth of energy imports—primarily LNG—from the US by the end of 2028 as part of a trade agreement. While the US currently supplies approximately 55% of the EU’s LNG imports, Qatar remains among the most critical suppliers.

At the beginning of the year, the German government attempted to reduce its dependence on the US. In February, Chancellor Friedrich Merz traveled to Qatar and the UAE with a business delegation to explore possibilities for new gas supply contracts.

The US, through its strikes against Iran, has—at least for now—ended this diversification attempt. Following the attack, Tehran announced that the Strait of Hormuz has been almost completely closed.

Winners of the war: Commodity companies and banks

While the German economy is clearly among the losers of the conflict, several commodity companies have already recorded high profits.

According to Bloomberg, British oil majors such as Shell and BP are reporting significantly higher earnings. BP, which operates approximately 2,400 Aral gas stations in Germany, announced a record profit of over $3 billion in the first quarter. Since the start of the year, the company’s market value has increased by approximately one-third.

Other entities are also experiencing a boom. The multinational oil trading firm Gunvor Group earned more profit in the first quarter of 2026 than in the entirety of the previous year. Large banks are also among the beneficiaries; Bank of America, for example, reported a 60% increase in revenue in the first quarter.

Calls to move away from fossil fuels intensify

The dramatic rise in oil and gas prices and the approaching raw material shortages have triggered renewed calls to move away from fossil fuels as much as possible in the medium term.

European Commission President Ursula von der Leyen recently stated during a meeting of the CDU/CSU parliamentary group: “We must clearly see that our heavy dependence on imported fossil fuels makes us vulnerable.”

Urging a rapid reduction in dependence through energy produced within the EU, von der Leyen noted, “Every kilowatt-hour of energy produced here contributes to economic stability, affordable energy, and thus European independence.” She called for the expansion of both renewable and nuclear energy.

Robert Zurawski, head of the Swedish energy company Vattenfall in Germany, made similar remarks, noting that gas prices would remain high in the medium term. According to him, the only logical conclusion is to “abandon the use of fossil fuels wherever possible.”

For one German company, this trend already appears to be yielding results: Siemens Energy reported an unexpected surge in orders at the beginning of the year.