The first ships that sailed out of the Strait of Hormuz didn’t just draw shipping maps. They updated the grocery lists, too. After Iran’s partial closure of the strait disrupted the choke point that carries about 20 percent of the world’s oil, traders are sold on something they know well: war is not just about missiles; it’s about a bill that lands on kitchen tables months later.
Brent crude climbing back and forth above US$100 a barrel, touching around US$120 on the worst days, is already more than a market headline, affecting diesel at the pump, bread in the oven and fertilizer on the farm. Even if forecasts indicate that Brent will average around US$90 in the second quarter, the risk premium is already there.
For richer economies, this may seem permanent. For most of the Southern Hemisphereit feels more like a stress test. The currency is weak, savings are thin and debt is heavy. In major importers such as Kenya, Senegal or Bangladesh, every US$10 rise in crude prices quickly reduces the subsidy space, raises freight costs and exacerbates urban food inflation.
We often talk about fat as if it is in a separate world from food. In fact, they are closely connected. Data from the Food and Agriculture Organization (FAO) showed that the global food price index rose in February for the first time in five months, with grains and vegetable oils leading the rise again. The United Nations reported a second consecutive monthly increase as energy-related costs weighed on food prices in March.
Oil prices drive the cost of moving grain, running irrigation pumps and producing fertilizer. When energy becomes more expensive, the cost structure of a bakery in Lagos or a corn mill in Bamako changes rapidly.
Global averages hide a more extreme story. FAO’s food price monitoring continued to indicate high grain prices in East Africa and conflict-affected markets. In Somalia, Sudan and South Sudan, and in fragile areas of the Sahel, major commodities may trade at levels that feel closer to economic siege than normal volatility.
