Lorcan Roche Kelly

AI Summary

→ WHAT IT COVERS Recorded live in London on May 7, Bloomberg's Odd Lots hosts Tracy Alloway and Joe Weisenthal speak with commodity specialist Javier Blass and Irish Farmers Journal editor Lorcan Roche Kelly about why oil, food, fertilizer, and electricity prices are behaving unexpectedly amid the Strait of Hormuz closure and global supply disruptions. → KEY INSIGHTS - **Oil price ceiling:** Despite 60-plus days of Strait of Hormuz closure, oil sits near $100 per barrel rather than $200 because strategic petroleum reserves globally are being drawn down rapidly, bypass pipelines are operating at capacity, and roughly 5 million barrels per day of demand destruction has occurred — primarily in lower-income nations like Pakistan and Bangladesh rather than major economies. - **Food price lag:** Global food supply is currently abundant — wheat and dairy are in surplus — but US wheat planting acreage in 2025 hit its lowest level since 1919. Farmers facing negative margins on fertilizer-to-corn price spreads are reducing plantings now, meaning a meaningful food price squeeze is 6–12 months away, not visible in today's grocery prices. - **Fertilizer front-loading:** European farmers purchased 60–80% more fertilizer than normal in November–December 2025 to beat the January 2026 Carbon Border Adjustment Mechanism tax, which adds up to €120 per ton on imported urea. This stockpile has cushioned the 2026 planting season, but once inventories clear, import prices will rise sharply due to both CBAM and competing demand from India. - **Electricity vs. oil shock distinction:** European wholesale electricity prices, using Germany as a benchmark, peaked near €1,000 per megawatt hour in 2022 and now sit around €80 — close to the pre-crisis norm of €50–75. Unlike oil, electricity directly determines business survival; a Paris baker's monthly bill went from €800 to €7,000 in 2022. The current crisis has not replicated that electricity shock, which limits broader economic damage. - **OPEC structural fracture:** The UAE's departure from OPEC represents a larger threat than previous exits by Indonesia, Qatar, Ecuador, or Angola because the UAE holds 4.5 million barrels per day of production capacity and targets 5 million-plus. Combined with a potential post-election Venezuela re-entering production, a market-share race among former OPEC members could structurally suppress oil prices over the medium term. → NOTABLE MOMENT Lorcan Roche Kelly revealed that the US cattle herd is at its smallest in 75 years, yet major beef processors like Tyson are losing roughly $150 million per quarter processing beef — meaning neither farmers nor processors are profiting from record retail beef prices, which are instead driven purely by supply scarcity. 💼 SPONSORS [{"name": "VanEck (RAAX ETF)", "url": "https://www.vaneck.com/raaxpod"}, {"name": "Adobe Acrobat", "url": "https://www.adobe.com"}, {"name": "Public", "url": "https://www.public.com/market"}] 🏷️ Commodity Markets, Oil Supply Disruption, Global Food Prices, OPEC Geopolitics, Fertilizer Trade Policy