Tyres Europe: Middle East conflict to weigh on European tire demand into 2027

Brussels — The ongoing Middle East conflict is expected to continue impacting European vehicle mileage and replacement tire demand well beyond the end of hostilities, according to a market update released by Tyres Europe.

In a report, prepared by Astutus Research and released 7 May, Tyres Europe said the conflict is affecting mobility through “elevated fuel prices and broader macroeconomic pressure from higher general inflation and the threat of rising interest rates.”

While fuel shortages have so far been avoided, Europe remains heavily dependent on imported diesel supplies, particularly from the Middle East and the US, after sanctions curtailed Russian supply.

Tyres Europe said the impact on miles driven is expected to “outlast the conflict itself.”

Futures contracts, said the report, indicate that oil prices are likely to peak during the current quarter before easing gradually towards the end of the year.

However, “embedded inflation and residual supply-chain disruption will continue to weigh on the economy and therefore motorists” into 2027, the report added.

For the tire industry, the situation represents “a headwind for replacement tire demand,” as fewer miles driven impacts replacement intervals.

Seasonal driving patterns could partly moderate the overall annual impact, Tyres Europe said, noting that discretionary travel typically increases during the summer months.

“Disruption during the early part of the year therefore has less impact on the aggregate annual result,” the report stated.