Germany's economy reels as oil prices spike and industry falters

Germany is facing economic pressure as oil prices surge and industrial struggles deepen. Brent crude has climbed to around $113 per barrel, with OPEC oil reaching $143, following supply disruptions linked to the Iran crisis. Meanwhile, Thyssenkrupp's shares have plunged to a 52-week low, and the government is now planning emergency measures to ease fuel costs.

The Iran crisis, which began on 2 March 2026, has sent oil prices soaring. Brent crude jumped from pre-crisis levels to between $106 and $113 per barrel, surpassing figures seen during the Ukraine war in 2022. With 20% of global oil supply passing through the Strait of Hormuz, disruptions have left the world short by roughly 11 million barrels a day. Analysts warn of further escalation, drawing parallels to past oil shocks that triggered recessions.

The surge in energy costs is hitting German industry hard. Thyssenkrupp's steel production is under strain, while its share price has collapsed by 31% in the last 30 days. The stock now sits at €7.46, nearly 44% below its October peak of €13.24. Raiffeisen has cut its 2026 growth forecast for the company, citing a tough environment for cyclical industrial stocks. Cheap imports are adding to the pressure, forcing Thyssenkrupp to expand production cuts at its French site. The company's struggles come as Chancellor Friedrich Merz questions Germany's legally mandated coal phaseout by 2038, signalling potential shifts in energy policy. In response to rising fuel costs, the federal government is preparing a relief package. Measures include releasing parts of the national oil reserves to stabilise prices and ease the burden on businesses and consumers.

The combination of soaring oil prices and industrial decline is creating challenges for Germany's economy. Thyssenkrupp's falling share price and production cuts highlight the strain on manufacturers, while government intervention aims to offset fuel cost hikes. The situation remains volatile as energy markets and industrial sectors adjust to ongoing disruptions.