BASF Faces Twin Headwinds: Middle East Oil Threat and Oil & Gas Exit Weigh on Shares

The spectre of a major oil price shock is looming over BASF, just as the chemicals giant accelerates its retreat from fossil fuel investments. Chief executive Markus Kamieth has issued a stark warning that the ongoing conflict in Iran could choke off as much as one-fifth of global crude supply, with the Strait of Hormuz blockade scenario threatening to remove up to 40% of refined products from the market. Brent crude is already flirting with the $100-a-barrel threshold, and Kamieth expects the full impact to hit in the second half of 2026.

That geopolitical risk is converging with a deliberate strategic pivot. Over the weekend, former BASF executive Hans-Ulrich Engel stepped down from the board of Harbour Energy after the chemical group’s stake in the oil-and-gas company dipped below the 25% threshold, stripping BASF of its right to two board seats. The move is the latest sign that Kamieth is serious about redeploying capital away from hydrocarbons and into the core chemicals business. The portfolio cleanup also includes selling a majority stake in the coatings division to private equity firm Carlyle and preparing an initial public offering of the agricultural chemicals unit.

Analysts Dial Back Expectations Even as Buyback Hums Along

The market’s response has been muted at best. BASF shares slipped 1.51% on the secondary day to €48.26, and subsequently edged down to €48.56, pushing the stock decisively below its 50-day moving average. Year-to-date, however, the stock is still up 8.54%.

Investment banks are tempering enthusiasm. Goldman Sachs analyst Georgina Fraser trimmed her price target from €65 to €63, while maintaining a buy recommendation. She warned that a new downturn in the European chemicals sector is brewing, with Chinese export pressure intensifying and raw material costs declining – a combination that compresses margins. UBS analyst Priyanka Patel kept a “neutral” rating and a €52 target, noting that the demand spike seen in China during March is now normalising.

Should investors sell immediately? Or is it worth buying BASF?

Despite the caution, BASF is pressing ahead with a multi-billion-euro share buyback. The company repurchased roughly 2.7 million of its own shares in the first week of June alone, and the programme is scheduled to run until mid-2026.

Cost-Cutting Drive Gathers Pace as Ludwigshafen Bleeds

The operational backdrop remains strained, particularly at home. BASF’s historical flagship site in Ludwigshafen, which employs around 33,000 people, is still reporting losses. Management has ruled out any return to cheap Russian gas, leaving the German location structurally disadvantaged.

Kamieth’s response is the “CoreShift” cost-cutting programme, which targets a 20% reduction in fixed costs in the core business by 2029. That will require further job cuts, although the company has not specified a number. The push to streamline comes even as the day-to-day business shows surprising resilience: May confirmed the positive trend from April, and BASF expects to hit consensus forecasts for the second quarter, with analysts pencilling in operating earnings of around €2.02 billion.

BASF at a turning point? This analysis reveals what investors need to know now.

Technical Picture Hints at Potential Rebound

On the charts, the stock’s slide has brought a critical support zone into view. The 200-day moving average sits at €46.87, and the Relative Strength Index has dropped to 31.5, a level that often signals an oversold condition. If that support holds, a technical bounce could materialise in the near term.

The next major catalyst is the second-quarter earnings report, scheduled for 29 July 2026. Until then, the direction of BASF shares will be dictated largely by events in the Middle East – and by investors’ confidence that Kamieth’s aggressive restructuring can shield the company from the coming oil shock.

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