The US-Iran war has not triggered a food crisis — yet. With Adam Hanieh and Susannah Savage

Episode Summary

Executive Summary: The episode examines how Gulf states became central to global food systems through oil-and-gas-linked fertilizer and chemical production, and whether the Strait of Hormuz crisis has truly been contained. Guests argue the shock was serious but uneven: Northern Hemisphere farmers largely escaped the worst, while fertilizer-dependent regions in South and Southeast Asia and poorer importers still face delayed yield and price risks.

Main Topics: Gulf industrial diversification into fertilizers and chemicals (Priority: 5/5): Adam Haniyeh explains that Gulf states moved beyond crude oil into downstream petrochemicals and fertilizers like urea, ammonia, and sulfur, making them essential to global food production. Why the Strait of Hormuz mattered for food security (Priority: 5/5): The closure threatened energy supplies, fertilizer exports, and already fragile global food security, especially for import-dependent countries and humanitarian crisis zones. Why the immediate price shock looked less severe than feared (Priority: 4/5): The hosts discuss why food and fertilizer prices did not spike as catastrophically as historical precedents, citing timing, existing inventories, and trade responses. China, India, and policy responses that softened the crisis (Priority: 4/5): China’s release of urea exports and India’s fertilizer subsidies helped stabilize markets and reduce the pass-through from fertilizer prices to food prices. Regional differences in impact (Priority: 5/5): The episode stresses that impacts were limited in Europe and the U.S. but more serious for countries like Morocco, Thailand, and parts of South Asia and sub-Saharan Africa. Future risks: next planting season and El Niño (Priority: 5/5): Susannah Savage warns that lower fertilizer use, persistent phosphate/sulfur constraints, re-escalation in the Gulf, and a possible strong El Niño could hit future harvests and food prices.

Key Arguments: The Gulf became central to food production because oil and gas expansion created large byproducts and revenue streams that were reinvested into fertilizer and petrochemical capacity. Around a third of global fertilizer exports now come from the Gulf region, concentrating critical inputs near a narrow chokepoint. The biggest near-term threat from Hormuz was not just commodity flow disruption but higher energy and fertilizer costs feeding into planting decisions and yields later. Food system effects are uneven: countries with domestic fertilizer capacity, stockpiles, or subsidies are less exposed than import-dependent states. China’s behavior was pivotal because it ultimately released urea exports after prioritizing domestic supply, easing global price pressure. The most serious risks may appear with a lag, during upcoming harvests, if farmers used less fertilizer or if prices rise again before the next planting cycle. Phosphate and sulfur-linked inputs remain vulnerable even though nitrogen fertilizer prices have fallen back, so the crisis is not fully over. Climate shocks such as El Niño could compound fertilizer shortages and create severe yield losses in vulnerable regions.

Data Points: Alarm level at crisis start: 8-9/10 - Adam Haniyeh’s assessment when the Strait of Hormuz first closed Alarm level later in the episode: 6/10 - Susannah Savage’s view of the situation after prices eased somewhat Alarm level for Adam at interview time: 7-9/10 - He remained highly concerned despite some market stabilization Global fertilizer exports from the Gulf: Around one-third - Share of world fertilizer exports coming from the Gulf region Sulfur exports from the Gulf: Close to 50% - Gulf share of global sulfur exports Morocco’s sulfur dependence on the Gulf: About three-quarters - Morocco relies on Gulf sulfur to produce phosphate fertilizer World Food Programme acute food insecurity: 318 million people - Estimated to face acute food insecurity through 2026 before the war Additional food insecurity from the war: 45 million people - Estimated extra people facing food insecurity because of the war China’s share of global oil trade: About one in four barrels - Oil demand growth helping drive Gulf energy expansion Gulf sovereign wealth fund assets: Around $4.3 trillion - Assets held by Gulf sovereign wealth funds Saudi Aramco profits comparison: Exceeding the combined profits of ExxonMobil, Chevron, BP, Shell, and TotalEnergies - Illustrates scale and profitability of Gulf national oil companies Thailand fertilizer price increase: About 30% - Example of input cost pressure on rice production Thailand diesel price increase: About 60% - Example of energy cost pressure on agriculture US farmers who had not bought ahead: About 25% - Susannah Savage on exposure to high fertilizer prices Global stock of grains: High - Helped cushion immediate food price effects, though no exact figure was given

Pivotal Quotes: "I think we could definitely rank the worry up around eight, nine at the time that piece came out. And I am still extremely concerned. I don't think this is behind us." — Adam Haniyeh: On his level of concern about a global food catastrophe "Around a third of the world's fertilizer exports coming from the region." — Adam Haniyeh: Explaining the Gulf’s importance to fertilizer supply chains "I think, I mean, I think I sit somewhere in the middle between these two ideas." — Susannah Savage: On whether lower fertilizer demand or timing explains the easing of prices

Implications: The crisis may have avoided immediate catastrophe, but food systems remain exposed to Gulf disruptions, fertilizer bottlenecks, and climate shocks. The biggest risks now lie in future harvests, especially in import-dependent and poorer countries.