A gap that depends on how long the conflict lasts, not on a single quarter

Confindustria's Research Center, in its April 2026 Congiuntura Flash, built two scenarios tied to the duration of the Middle East conflict. In the more favorable scenario, with the war ending by mid-2026 and oil around 110 dollars a barrel, Italian companies would pay 7 billion euros more than in 2025 for energy, with the share of energy costs in total costs rising from 4.9% to 5.9%. In the worse scenario, with the conflict dragging on through all of 2026 and oil at 140 dollars, the burden would rise to 21 billion euros, pushing the energy cost share up to 7.6%, a level close to the critical 8.3% reached in 2022, a threshold Confindustria itself has described as unsustainable for a large share of the production system. The useful takeaway for planners isn't which of the two scenarios will materialize, it's that Italy already starts from a position of disadvantage: in 2025 the energy cost share stood at 4.9%, up 25% from the pre-Covid 3.9%, and already higher than in France and Germany.

What it means for businesses

A rise of one to nearly three percentage points in the weight of a single cost line, depending on the scenario, is rarely absorbed evenly: it falls disproportionately on companies with less ability to pass the cost through to end customers, typically those in more price-elastic markets or locked into multi-year contracts negotiated at earlier price levels. In these cases, the energy burden doesn't shrink margin in proportion to its weight on costs, it shrinks it more, because it directly compresses the pricing headroom that would otherwise be available to absorb other cost swings, from raw materials to logistics. This mechanism affects large corporations and SMEs alike, with one meaningful difference: SMEs typically have less contractual leverage and less ability to diversify their energy suppliers. It's worth noting that Confindustria's two scenarios aren't point forecasts but working hypotheses tied to evolving geopolitical variables, good reason to build financial plans and sourcing strategies that hold up under both, not just the more favorable one.

Why the risk isn't confined to the P&L

The energy gap doesn't only show up in individual companies' P&L, it also feeds into credit risk assessment across entire supply chains. Allianz Trade's Insolvency Report explicitly attributes part of its upward revision for Italian insolvencies in 2026, now put at around 12,750 cases (+5%, up from a pre-conflict estimate of +2%), to Italy's structural dependency on imported energy, with a slight correction to 12,300 cases expected in 2027. In 2025, the manufacturing and trade sectors recorded year-on-year insolvency growth of +21% and +12% respectively, and Allianz Trade explicitly flags construction, retail and energy-intensive manufacturing (metals, chemicals, packaging) as the segments most exposed to absorbing price shocks on supplies. This means energy costs aren't only a P&L problem: they can deteriorate, with a lag of several months, the financial standing of customers and suppliers a company is exposed to, turning a sector-specific price increase into a counterparty risk that spreads along the supply chain, and therefore into an issue for finance and procurement alike.

What CFOs can do

Facing a gap that depends on uncertain geopolitical scenarios but remains structurally unfavorable for Italy either way, the most effective defensive levers for a CFO are the ones that hold up under both scenarios, not the ones that bet on the more favorable one:

• Energy hedging: consider locking in a share of supply over multi-year horizons, even at the cost of forgoing a potential drop in spot prices, to stabilize cash planning regardless of how the conflict evolves.
• Pricing review: check which product lines or existing contracts haven't yet absorbed the more conservative scenario's energy burden (5.9% cost share), not just the current one.
• Working capital management: review payment terms with energy-intensive suppliers and the depth of safety stock, which absorbs capital differently depending on whether energy costs are rising or stabilizing.
• Counterparty risk monitoring: fold energy exposure into credit risk assessment of strategic customers and suppliers, not just into internal planning.

What heads of procurement can do

For anyone running purchasing, the energy gap isn't just a pricing issue, it's a continuity and supplier-risk issue, especially since the transmission channels of the Middle East conflict, per the same Allianz Trade analysis, run through logistics and raw materials as well as energy:

• Segment suppliers by energy intensity: map which strategic suppliers operate in energy-intensive sectors (metals, chemicals, packaging), the ones Allianz Trade flags as most exposed to absorbing price shocks, and assess their financial standing more frequently than the rest of the supplier base.
• Diversification and redundancy: where possible, qualify alternative suppliers for inputs most exposed to indirect energy price rises, to avoid facing a price increase and a supply disruption at the same time.
• Targeted contract renegotiation: review price-revision clauses in multi-year supply contracts, distinguishing between suppliers who have already priced in the conservative scenario (5.9%) and those who will pass it through later, risking a cluster of price-increase requests in the same period.
• Selective strategic stockpiling: consider raising safety stock only for inputs whose suppliers are most exposed to energy and supply-chain risk, avoiding across-the-board stockpiling that ties up working capital without reducing real risk.

Where the data meets the decision

The practical difficulty with these checklists, the financial one and the procurement one, isn't identifying the levers, finance and purchasing teams already know them, it's updating them as quickly as energy prices, contractual exposure, counterparty risk and supplier risk actually move, variables that are rarely observed together, at the same frequency, and across different functions. This is the kind of problem WhAI, Vedrai's decision intelligence platform, is built to address: not replacing the judgment of CFOs or procurement leads, but keeping energy cost, per-line margin, cash exposure and supplier risk explicitly linked, so the decision on which lever to pull, and when, doesn't depend on the availability of an ad hoc analysis but becomes part of ongoing planning, shared across the functions that need to act together.