BASF’s Surprising Rally: Oil Crisis and Spinoff Ambitions Combine to Lift the Stock

BASF shares climb over 3% as Middle East tensions boost competitive edge and spin-off of €20-30bn agri unit nears execution

For a company that has long traded at a structural discount, BASF is suddenly drawing attention from two very different flanks. Shares have climbed more than 3% over the past seven days, propelled by a fresh wave of geopolitical turmoil in the Middle East and the clearest signal yet that the planned sale of its agricultural division is moving toward execution.

The chemical giant closed Tuesday’s Xetra session at €49.33, a gain of 1.17% on the day. That marks an extension of a move that began earlier this week, when the renewed escalation of the Iran conflict sent Brent crude toward $85 a barrel. While higher oil costs typically hammer chemical producers, BASF has emerged as an unlikely beneficiary. Analysts argue that its ability to pass through raw-material inflation surpasses that of Asian rivals, particularly if the Strait of Hormuz were to be disrupted. The flexibility to switch from expensive naphtha to butane and propane – a capability CFO Dirk Elvermann flagged as recently as early July – is now being cited by market participants as a competitive edge.

The same narrative lifted other European chemical names. Wacker Chemie rose 1.15% to €96.35 in the MDAX, while fertilizer specialist K+S gained 1.45% to €13.98 on expectations that agricultural prices would remain elevated.

But geopolitics is only half the story. The other catalyst comes from within BASF’s own restructuring agenda. The annual general meeting in April 2026 gave the green light to carve out the Agricultural Solutions business, with a targeted initial public offering in the second quarter of 2027. Media reports peg the unit’s valuation at between €20 billion and €30 billion – a figure that, at the upper end, would represent more than 70% of BASF’s current market capitalization of €42.05 billion. The division generated €9.6 billion in sales in 2025 with an EBITDA margin above 20%, providing a concrete basis for the spin-off narrative.

CEO Markus Kamieth has made no secret of his ambition: to shrink the conglomerate discount that has long dogged the stock. Corteva, a key competitor in crop chemicals, trades at a substantially higher EBITDA multiple, and a successful listing could unlock value for BASF’s remaining shareholders. While a direct sale of a stake remains an option under the dual-track process, the IPO path is the one currently being prepared for registration.

The next pivotal date for investors is July 29, 2026, when BASF publishes its half-year results. The quarterly numbers will test whether the efficiency programs are gaining traction and whether margins in the core chemicals business can hold up. If they do, the valuation gap could narrow further. If margins remain under pressure, the recent enthusiasm may prove short-lived.

Technically, the stock has found a floor above its 200-day moving average of €47.51, a level that has offered solid support. But it still sits roughly 1% below the 50-day line near €49.85 and remains almost 11% off the 52-week high of €55.05. With the relative strength index at 56.7, the shares are not yet overbought, leaving room for further upside if the catalysts align.

Risks are not hard to find. The EU’s Methane Regulation taking effect in 2027 could weigh on the competitiveness of European production sites, while bureaucratic hurdles around the hydrogen economy add another layer of cost. Moreover, if oil prices remain elevated, the ability to pass on higher feedstock costs might erode margins faster than price increases can keep pace. A spin-off valuation at the lower end of the €20–€30 billion range would also deflate some of the current optimism.

On the operational side, there is a bright spot: BASF’s new mega-plant in China was completed under budget, a development that should improve the cost structure in coming years. Combined with the stock’s year-to-date gain of 10.08% and a 12-month advance of 13.79%, the broader picture is one of a company slowly shedding its conglomerate shackles – provided the quarterly report confirms that the underlying business can stand on its own. Until then, the twin forces of geopolitics and restructuring will keep the stock in focus.