March 19 (Reuters) - Lanxess said it was raising chemical prices to counter the effects of the Middle East conflict, after the speciality chemicals maker reported annual results and announced job cuts earlier on Thursday.

The U.S.-Israeli war on Iran, continuing into its third week, has pushed up prices in the chemicals sector and disrupted markets, sparking fears that the widening conflict will create an oil price shock, raise inflation and dampen consumer demand.

Chemical companies have been hit particularly hard, as many raw materials for the industry are produced in the Middle East.

Lanxess CEO Matthias Zachert told reporters that the prices the company pays for energy and materials had been going up since the war started.

"We have to do something about it and pass on these price increases, so that we do not have to foot the bill," Zachert said.

"If you have a look at the situation, our competitors are doing the same thing, but we started early in order to counteract as early as possible."

Some other chemicals companies, including Brenntag , Wacker Chemie  and BASF , have also started raising prices due to surging energy costs.

If the Middle East conflict continues, the chemical industry will see a further and lasting increase in product prices, Zachert said.

In a separate statement on Thursday, German chemicals association VCI said the war significantly increased the risks to the global economy, particularly due to the blockade of the Strait of Hormuz.

"Consequently, strong price increases are expected, especially for products where the region plays a central role in the global trade," the industry lobby said.