Bulletin: Oil prices fall

Oil prices down

At the time of writing, a ceasefire is in effect in the conflict between Israel, Iran and the USA. Markets have already responded favourably – oil prices have dropped. The price of Brent crude oil has declined to below $70 a barrel. The price had risen from around $70 on June 12, the day before Israel’s initial attack, to a peak of $81.40.

IGD opinion

The ceasefire represents progress and reduces the threat to movement of oil through the Persian Gulf and Red Sea bottlenecks. The threat of Iran blocking the Strait of Hormuz has not occurred. This would have impacted 20% of the world’s oil and gas supplies.

But it is not clear that tensions between the major combatants have been resolved in the long-term. This conflict underlines once again the case for greater energy independence for the UK overall and the food system specifically.

Industrial Strategy

The government has published the Industrial Strategy (IS). It is a 10-year plan to “significantly increase business investment in 8 growth-driving sectors.” The sectors include Professional and Business Services and Advanced manufacturing but does not include the food system.

The IS includes plans to reduce electricity costs by up to 25% for more than 7,000 businesses.

IGD opinion

While the IS does not include the food and drink industry, it recognises the issues faced by the UK economy and it specifies common sense solutions. Long-term, it has the potential to create a better operational landscape for UK businesses, including the food and drink industry.

National Security Strategy

The government has published the National Security Strategy 2025 (NCS). Food security is positioned as a vital strand within the UK’s national resilience strategy, interwoven with energy, health, cyber, and border security. The strategy highlights:

• The potential for food insecurity to emerge from climate, supply chain, or conflict-driven disruptions.

• The need for domestic preparedness and international cooperation to address such risks.

• Its importance in upholding economic and social stability, especially in a world facing rising confrontation and resource scarcity.

Alongside the strategy, DEFRA announced a £1bn investment in the National Biosecurity Centre in Weybridge. The investment will aim to tackle animal disease outbreaks posing a threat to the British livestock industry.

Download our latest Resilience report: Building a resilient food system to understand:

• Key risks impacting the food system

• Why climate change and geopolitics pose the gravest threats

• How the nature of risk has evolved over the past year

• Examples of businesses and governments prioritising resilience

Weight loss

Prescriptions for weight loss jabs (Mounjaro) are now available in GP surgeries in England. They are only available currently for those people with:

• A BMI of 40 or over (or 37.5 if from a minority ethnic background)

• Four out of five of the following conditions: type 2 diabetes, high blood pressure, heart and vascular disease, high cholesterol and obstructive sleep apnoea

IGD opinion

Weight loss drugs will undoubtedly have an impact on the food industry; however, they are only a part of the solution which is needed to drive overall population diet change and improve health outcomes. Look out for IGD’s research on Weight loss drugs which will be released in July.

Welfare reform update

The government has made major concessions to the more than 100 Labour MPS opposing the Universal Credit and Personal Independence Payment Bill. They were concerned about plans to cut disability and sickness-related benefits payments to save £5bn a year by 2030. Under the revised policy, current recipients of Personal Independence Payments (PIP) or the health component of Universal Credit will retain their support. The planned cuts will now only apply to future claimants. Under the revised policy, current recipients of PIPs or the health component of Universal Credit will retain their support, costing the Government £1.5bn.

 

The legislation is intended to manage welfare spending and to support welfare claimants in returning to work. The vote on the bill is currently scheduled to take place next Tuesday.

Climate targets

The Climate Change Committee (CCC) has reported that government policies to reduce emissions have improved since last year. Emissions fell 2.5% in 2024 and the UK’s emissions have halved (-50.4%) since 1990.

The CCC has called for more action to ensure the UK meets its legally binding climate targets. This includes:

• Making electricity cheaper

• Putting policies and incentives in place to ramp up tree planting and peatland restoration.

• Publishing a strategy to support skills