Iran War Adds $8.5 Billion to Spanish Industry Energy Costs in 2026

Spain's manufacturing sector is absorbing a historic energy shock. The Iran war could add nearly €7.4 billion ($8.5 billion) to Spanish manufacturers' costs through the end of 2026, according to the Alliance for the Competitiveness of Spanish Industry, a lobby group representing 60% of Spain's gross industrial product-1. Of that total, gas accounts for €4.2 billion and electricity for €3.2 billion, with 70% of the impact concentrated between September and December-4.

Day-ahead electricity prices have averaged nearly €150 per megawatt-hour in September 2026, up sharply from €61 in September 2025, while gas prices have exceeded €80 per megawatt-hour. Oil prices have climbed above $100 a barrel as shipping through the Strait of Hormuz remains heavily disrupted-1.

Key Figures at a Glance

• €7.4 billion ($8.5 billion) — total extra energy costs for Spanish manufacturers through 2026
• €4.2 billion — additional gas costs
• €3.2 billion — additional electricity costs
• 70% — share of the impact expected between September and December 2026
• €150/MWh — average day-ahead electricity price in September 2026 (vs €61/MWh in September 2025)
• €80+/MWh — gas prices exceeded this level in September 2026
• $100+/barrel — oil prices following Houthi attacks on Saudi energy infrastructure

Why Are Spanish Industrial Energy Costs Rising So Sharply?

The primary driver is the Iran war and the resulting disruption to Middle Eastern energy supply routes. Shipping through the Strait of Hormuz, a critical artery for oil exports from the Middle East, remains heavily disrupted, pushing global energy prices higher across the board-1.

For Spain specifically, the impact is amplified by the country's industrial structure. Energy-intensive sectors such as chemicals, metals, food processing, and ceramics are disproportionately affected by electricity and gas price spikes. The Alliance for the Competitiveness of Spanish Industry warns that many manufacturers cannot absorb these additional costs alone-1.

How Much More Are Spanish Manufacturers Paying?

The table below breaks down the additional energy costs by energy source and compares September 2026 prices with September 2025 levels:

The concentration of the impact in the final four months of the year creates a cash-flow challenge for manufacturers. Companies that locked in energy contracts earlier in 2026 may be partially insulated, but those buying on spot markets face immediate margin pressure.

What Does This Mean for Spanish Industry and Jobs?

The Alliance has urged Spanish authorities to maintain existing support measures and introduce stronger measures to protect production, investment, and jobs. Many current support measures expire in the final months of 2026, creating a policy cliff-edge just as energy costs peak-1.

Alliance spokesperson Carlos Reinoso said the crisis has intensified existing competitiveness problems and warned that manufacturers cannot absorb the additional energy costs alone-1. Without intervention, the risk is that some energy-intensive production shifts to regions with lower energy costs, potentially leading to job losses in industrial regions.

How Does This Affect Small Businesses and the Broader Economy?

Small and medium-sized manufacturers have less bargaining power with energy suppliers and fewer resources to hedge against price volatility. For these businesses, the €7.4 billion in extra costs translates into either lower margins, higher prices for customers, or reduced investment in equipment and hiring.

The broader economic impact depends on how much of the cost increase is passed through to consumers. If manufacturers raise prices significantly, it could feed into consumer price inflation, which is already elevated in Spain. If they absorb costs, profit margins compress and investment slows.

What Should Businesses Do to Manage Energy Cost Risk?

• Review energy contracts: Lock in fixed-price agreements where possible before winter demand peaks.
• Invest in efficiency: Energy audits, equipment upgrades, and waste-heat recovery can reduce consumption.
• Diversify suppliers: Multi-source energy procurement reduces dependence on volatile spot markets.
• Monitor policy support: Track whether Spanish and EU support measures are extended beyond 2026.
• Scenario planning: Model cash-flow impacts under different energy price scenarios for Q4 2026 and 2027.

Frequently Asked Questions (FAQ)

How much are Spanish industry energy costs rising in 2026?

The Iran war could add nearly €7.4 billion ($8.5 billion) to Spanish manufacturers' energy costs through the end of 2026, according to the Alliance for the Competitiveness of Spanish Industry. Gas accounts for €4.2 billion and electricity for €3.2 billion of that total.

Why are electricity prices so high in Spain in 2026?

Day-ahead electricity prices averaged nearly €150 per megawatt-hour in September 2026, up from €61 in September 2025. The increase is driven by the Iran war, disruption to Strait of Hormuz shipping, and higher global gas prices that feed into electricity generation costs.

Which Spanish industries are most affected by higher energy costs?

Energy-intensive sectors such as chemicals, metals, food processing, ceramics, and manufacturing are most affected. These industries consume large amounts of electricity and gas relative to their output, leaving them highly exposed to price spikes.

Will energy costs fall in 2027?

The outlook depends on geopolitical developments, particularly the Iran conflict and Strait of Hormuz shipping. If disruptions ease and global energy supply normalizes, prices could moderate. However, the Alliance warns that without continued support, many manufacturers may struggle to remain competitive even if prices stabilize.

What support is available for Spanish manufacturers facing higher energy costs?

The Alliance has urged authorities to maintain existing support measures and introduce stronger measures to protect production, investment, and jobs. Many current measures expire in the final months of 2026, so businesses should monitor policy announcements closely.