German investor confidence has collapsed to its weakest level in more than three years, shaken by energy price spikes from the Middle East conflict. The ZEW Indicator of Economic Sentiment plummeted to minus 17.2 in April, down dramatically from minus 0.5 in March—far worse than the minus 5.0 economists had forecast.

The monthly survey of 192 analysts and investors at banks, insurers and businesses marks the second negative reading since April last year and the lowest since December 2022. Brent crude has jumped over 30% since strikes on Iran at the end of February, while benchmark gas prices are more than 20% higher.

The price surge is hitting Germany's energy-intensive industrial sector particularly hard. "The economic consequences of the Iran war for the German economy go far beyond price increases," said ZEW President Achim Wambach. Businesses are worried about long-term energy supply shortages, which discourages investment and weakens the effect of government stimulus measures.