This episode features a live recording from London's Wilton's Music Hall on May 7th, with hosts Tracy Alloway and Joe Weisenthal interviewing two commodities specialists. Javier Blas, Bloomberg Opinion columnist and author of The World for Sale, provides insights on energy markets and geopolitics. Lorcan Roche Kelly, business editor at Irish Farmer's Journal and former farmer, offers ground-level perspective on agricultural markets.

The conversation covers the ongoing Strait of Hormuz crisis, now over two months old, and its impact on global energy and food systems. Despite initial fears of $200 oil, prices have stabilized around $100 per barrel. The discussion explores why this crisis feels different from 2022's energy shock, examining everything from jet fuel shortages to beef cattle inventories and the surprising dynamics of cheese production driven by protein demand.

Strait of Hormuz Crisis: Why Oil Isn't at $200

Europe faces jet fuel shortages by summer despite adequate supplies through June, as "demand goes up a lot during the summer" while refineries worldwide maximize production - Javier

Oil prices remain around $100 despite 60+ days of strait closure, defying expectations of $200+ oil, due to massive demand destruction of ~5 million barrels daily without severe economic pain

The crisis differs from 2022 because electricity prices in Europe average normal levels (~80 euros/MWh) versus the 1,000 euros peak that created "bankruptcy event" bills for businesses

Reopening depends on sufficient economic pain for both sides - Iran faces unemployment and inflation but can impose hardship on citizens, while Trump faces election pressure but strong US economic performance

Food Security: Current Abundance Masks Future Shortages

Global food supply through 2025-2026 is "really strong" with abundant wheat and milk production up 5-7% in Europe, but beef cattle herds at 75-year US lows drive record prices

US wheat plantation forecast shows "lowest wheat plantation in the US total average ever, going back to 1919" signaling severe future supply constraints - Lorcan

Current food price pressures stem from transport costs rather than production costs, but farmer planting decisions today will create shortages "in twelve months and maybe this time next year"

Beef processors like Tyson lost $150 million in three months despite high retail prices because "there are not enough cattle to be killed" with competing demand for limited supply

Fertilizer Markets: European Policy Creates Temporary Glut

European farmers stockpiled fertilizer in November-December 2025 ahead of Carbon Border Adjustment Mechanism (CBAM) tax, boosting purchases 60-80% above normal winter levels

CBAM adds up to 120 euros per ton on urea imports starting January 2026, creating competitive advantage for domestic European producers who must buy carbon credits

Current fertilizer abundance masks future shortages as countries like India secure long-term contracts from North African suppliers (Algeria, Morocco, Egypt) that Europe traditionally relied on

US farmers face negative spread economics - fertilizer costs doubled while corn prices barely moved from $4.50/bushel, unlike 2022 when both costs and revenues rose together

OPEC Crisis: UAE Exit Threatens Cartel Stability

UAE leaving OPEC represents "the biggest challenge that OPEC has faced" as they have ambition, geological capacity, and money to increase production from 4.5 to 5+ million barrels daily - Javier

UAE was withholding more spare capacity as percentage of production than Saudi Arabia, making their departure particularly damaging to OPEC's market control strategy

Future Venezuela elections could bring opposition victory, historically "very hostile to OPEC," potentially adding another major producer seeking maximum output

When Strait reopens, initial demand for inventory replenishment will give way to "race for market share" between UAE and Saudi Arabia, pressuring oil prices downward

Protein Revolution: GLP-1 Drugs Reshape Food Markets

GLP-1 drugs drive consumers to "eat a lot less" overall but "tank up in protein," creating massive investment in whey protein infrastructure as companies add protein to everything

Cheese production economics inverted - whey protein now the primary profit driver while cheese becomes byproduct, with "four or five absolutely massive cheese plants being built" in the US

Producers focus on soft cheeses for quick market turnaround rather than aged varieties, creating future shortage of "nice aged one year two year old cheese" - Lorcan advises buying now

American trade policy impact on European exports limited to higher-value products like wine and butter, with foreign exchange rates causing more disruption than tariffs