Rising energy prices, spurred by conflict in the Middle East, are creating a “double hit” to Sweden’s chemical, plastics, and rubber industries, according to a warning issued this week by IKEM – Innovations- and Chemistry Industry in Sweden.
The industry group cited rapidly increasing costs for oil and natural gas, compounded by disruptions in the Strait of Hormuz, as creating “acute concern” on global energy markets and directly impacting Europe’s energy supply. The assessment, released on March 5, 2026, comes as Swedish industry already faces “pressured profitability, weaker volumes and continued tough international competition,” according to IKEM’s latest industrial barometer.
“Our member companies were already under great pressure, and the rapidly rising energy and raw material prices make the situation even more strained. It hits production directly,” said Jakob Tellgren, CEO of IKEM, in a press statement. “No one knows how the conflict will develop, but the effects are already being felt now.”
The immediate impact is increased costs for essential inputs like oil and gas. Yet, IKEM also warned that the conflict is slowing the recovery of the global economy, delaying anticipated sales increases for Swedish industrial firms. Industries specifically named as being particularly vulnerable include chemicals, refineries, and plastics and rubber manufacturing.
IKEM is calling for faster and simpler permitting processes, including the establishment of a new national agency for environmental reviews, to bolster the long-term competitiveness of Swedish industry. The organization emphasized the need for government action to address the challenges, stating that the geopolitical uncertainty underscores the importance of securing favorable conditions for Swedish businesses.
The warning from IKEM follows reports of a record-breaking increase in oil prices this week, and rising gasoline costs across Sweden.
