Exposed Again: Germany, European Energy Security, and the Lessons of the Iran Conflict

The closure of the Strait of Hormuz in March 2026 triggered the largest oil supply disruption ever recorded, and confronted Germany with a third major energy security test in less than five years. A new analysis by adelphi examines the cascading consequences for German industry, European supply policy, and the long-term future of the Energiewende.

When U.S. and Israeli forces launched their military attack “Operation Epic Fury” against Iran on 28 February 2026, global energy markets did not need long to respond. Within days, Iranian forces had declared the Strait of Hormuz, the narrow chokepoint through which roughly 20 per cent of the world's seaborne oil trade passes, effectively closed. Global oil supply fell by 10.1 million barrels per day in a single month, the sharpest decline in the history of recorded energy markets. European gas benchmark prices nearly doubled within weeks. And Germany, still in the early stages of an economic recovery, found itself dangerously exposed.

German industry at an inflection point

For Germany's industrial base, already under pressure from years of elevated energy costs, the Iran conflict has arrived at a particularly difficult moment. Unlike 2022, when the primary fear was physical scarcity and the risk of gas rationing, the current crisis manifests primarily through price: companies are not running out of energy, but they are paying substantially more for it.

The consequences are especially visible in the chemical industry, Germany's third-largest industrial sector and a critical upstream supplier across the economy. The German Chemical Industry Association (VCI) reported in late May 2026 that production, sales, and prices all fell in the first quarter, with little prospect of near-term recovery. Crucially, several chemical companies are now accelerating investment in facilities abroad: a structural shift that, if sustained, could have lasting consequences for Germany's industrial base that go well beyond the current crisis.

The automotive sector has so far reported more limited direct impact, but analysts caution that this may reflect a lag rather than an exemption, companies drawing on inventory buffers and forward contracts will begin to feel the full force of input cost increases over the coming quarters.

Shipping rerouting and the risk of a permanent new normal

A less-discussed but potentially lasting consequence of the Strait closure is its effect on global shipping. With the Strait effectively shut, carriers have rerouted vessels around the Cape of Good Hope, adding 10 to 14 days to Asia–Europe voyages, and doing so on top of Red Sea diversions already in place since the 2023–24 Houthi attacks. Freight rates and war-risk insurance premiums have risen sharply as a result. Logistics specialists warn that this rerouting risks becoming entrenched: if war-related insurance clauses continue to deter transit even after a formalised ceasefire, Europe's importers could face structurally higher operating costs for years to come.