Rheinmetall Sees Boom in Arms Sales Amidst Middle East Conflict
German defense giant Rheinmetall is experiencing a surge in business, particularly for its air defense systems, fueled by the escalating conflict in the Middle East. The company forecasts continued strong growth in 2026, building on record earnings from 2025, as global demand for its armaments increases.
Conflict Drives Demand
The current conflict began with US-Israeli strikes on Iran in late February, which prompted retaliatory attacks from Iran across the region. This has created a heightened need for defense systems, particularly those capable of intercepting drones and missiles. Rheinmetall CEO Armin Papperger stated that the company received a significant increase in inquiries following the weekend of intensified conflict, with “the phones did not stop ringing.”
Air Defense Systems in High Demand
Rheinmetall’s air defense systems have already proven effective in the region, with over 100 drones reportedly shot down during the recent escalation. The company’s range of armaments designed to defend against drone and missile attacks are now in high demand. Rheinmetall expects a flurry of orders from the Middle East and other regions in the coming months.
Financial Projections and Expansion
Rheinmetall is forecasting sales to increase by up to 45% in 2026, reaching a maximum of 14.5 billion euros ($16.9 billion). This follows a near 30% increase in sales in 2025. The company’s core profit jumped by a third in 2025, reaching a record 1.8 billion euros. Its order backlog has also reached a new high of 63.8 billion euros.
The company has been expanding its production capacity, opening new munitions plants across Europe and acquiring a German warship builder, Naval Vessels Luerssen, to expand into naval defense. Rheinmetall, which previously focused heavily on Europe, is now considering expanding its reach to the Middle East depending on the evolution of the crisis.
Broader Trends in Defense Spending
Rheinmetall’s success is part of a broader trend of increased defense spending in Europe, driven by Russia’s invasion of Ukraine in 2022 and concerns about the reliability of US security commitments under President Donald Trump. Germany has overtaken China to become the world’s fourth-largest arms exporter, with 5.7% of global exports.
US Munitions Expenditure
Rheinmetall estimates that the U.S. Expended around 2,000 munitions in the first 72 hours of the conflict with Iran, costing between $3.5 to $4 billion.