FRANKFURT, (Reuters) – German parts supplier Continental stated Friday that it expected energy, logistics, and material costs to rise by 3.5 Billion Euros ($3.7Billion) due to COVID-19, the Ukraine war and is currently in negotiations with customers for increased prices.

As Chief Executive Nikolai Setzer stated to shareholders, raw material markets and supply chains were tightened for many months by the pandemic. Furthermore, Russia’s sanctions on Russia have further impacted the situation.

He said lockdowns in China caused by the latest pandemic have further blocked supply chains.

Setzer declared at the company’s annual general assembly, “If the geopolitical position in Eastern Europe is tense or worsens this could cause additional lasting disruptions of production, supply chain and demand.”

($1 = 0.9459 euros)