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flag Middle East conflict raises oil and energy costs, straining Europe’s manufacturing sector, especially in Germany, leading to higher prices, job cuts, and investment delays.

flag Europe’s industrial sector, especially in Germany, is under severe strain as Middle East conflict disrupts supply chains and drives raw material and energy costs higher. flag Crude oil near $120 a barrel and elevated power prices—$132 per megawatt hour in Germany—have hit mid-sized manufacturers like Gechem hard, with input costs rising and firms freezing hiring or delaying investments. flag The IW German Economic Institute warns of up to €46 billion in potential losses if oil stays at $100 a barrel. flag Insolvency rates hit a 2014 high in 2025, with major firms cutting jobs and raising prices amid ongoing disruptions to supplies of sulfur, aluminum, and polyethylene.

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