By Joshua Kirby

BASF said it is raising the prices of many of its products by up to 30% as shockwaves from the conflict in the Middle East take their toll on an already beleaguered European industrial sector.

Prices of products in the German chemicals group's home-care, industrial & institutional cleaning and industrial formulators segments in Europe will rise by up to nearly a third, or even more in some cases. The increases are effective immediately or as allowed by existing contracts, the supplier of industrial chemicals said.

"The move primarily comes in response to significant volatility in the pricing and availability of key raw materials, increasing domestic and transcontinental logistics costs, and soaring packaging and energy costs," BASF said Wednesday.

German chemicals association VCI warned last week that the war in the Middle East was showing early signs of hitting the industry's supply chain, with the immediate rise in oil and gas prices beginning to spread to other raw materials.

"The longer the war lasts, the more severe the consequences will be," VCI boss Wolfgang Grosse Entrup said at the time.

A key indicator for economic sentiment in Germany sank this month, according to think-tank ZEW, with a sharp downturn in the mood among sectors including chemicals, pharmaceuticals and automotive in Europe's most important industrial nation.

"The escalation in the Middle East spikes energy prices and increases inflationary pressure," ZEW President Achim Wambach said Tuesday.

Iran's effective blockade of the Strait of Hormuz chokepoint on the key Persian Gulf waterway has sent oil prices soaring, and has also created a bottleneck for critical raw materials such as ammonia and phosphate, helium and sulfur. Norwegian aluminum producer Norsk Hydro said last week that its Qatar smelter would operate at 60% capacity after its Qatari partner was forced to limit supply of natural gas.

The rise in hydrocarbon prices over the first 10 days of the Gulf conflict cost European taxpayers an additional 3 billion euros, equivalent to about $3.4 billion, in costs for fossil-fuel imports, European Commission President Ursula von der Leyen said this week.

The fresh blow to European industry comes after production tumbled at the start of the year, ahead of the massive airstrikes on Iran by U.S. and Israeli forces in February. The January downturn poured cold water on hopes that fiscal stimulus could add some vigor to Europe's moribund factory sector.

"The ongoing war in Iran--which has sent energy prices soaring--is about to make a bad situation worse," noted Ankita Amajuri, an economist at Pantheon Macroeconomics.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

March 18, 2026 06:24 ET (10:24 GMT)

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