The global risks reshaping food

Food and drink businesses are operating in an increasingly unpredictable environment. In the space of a few days, a US-Russia diesel deal introduced fresh uncertainty into global energy markets, Houthi attacks on Saudi Arabia highlighted the risk of disruption to global oil markets, and hackers reportedly turned supermarket refrigeration systems into sources of heat. 

What is happening? 

US / Russia diesel deal 

The US and Russia have announced a new deal under which Russia will supply diesel to the US and global markets. The announcement included more than  300,000 tonnes immediately and a further 500,000 tonnes in November.  

300,000 tonnes of diesel would be 2,250,000 barrels (at 7.5 barrels per tonne). The US uses about 3,600,000 barrels of diesel monthly, so the delivery promised for October would be a large contribution.   

President Trump’s stated aim is to reduce the price of diesel for businesses and consumers in the US, helping to manage the cost-of living ahead of November’s congressional elections.  

Further shipments are expected if conditions allow. However, Russia’s refining capacity has been affected by Ukrainian strikes, creating uncertainty over how much fuel can be delivered and how quickly. 

The deal has also provoked a backlash from other nations, because it could deliver an economic benefit to Russia, while the conflict in Ukraine continues.  

The US has urged Ukraine to cease attacks on Russian energy infrastructure but, for the time being, Russia and Ukraine each continue to attack energy targets. 

What the deal means 

The immediate implication for food businesses is greater uncertainty in energy markets, rather than any clear reduction in costs. 

Delivering diesel on the scale promised would be a significant logistical undertaking, and the scale and timing of any market impact remain uncertain, particularly given the pressures on Russia's refining capacity. 

Any effect on diesel prices in the US or globally will depend on whether supplies are delivered as planned and how other geopolitical events develop. 

The deal also has wider geopolitical consequences. It could reduce pressure on Russia to seek a more lasting resolution to war in Ukraine. Continued conflict would keep global food and energy markets unsettled. 

Conflict in the Middle East 

The potential impact of the deal on energy markets could be quickly overshadowed by further conflict in the Middle East, illustrating how fast-moving and interconnected the risks have become. 

Saudi forces are in action in Yemen in support of the Yemeni government, while Yemen’s Houthi militants,  backed by Iran, have launched fresh strikes against Saudi Arabia. 

The Houthis have also been increasingly active around the Bab-el-Mandab Strait, threatening shipping.  

Wider tensions across the Middle East, including in the Persian Gulf, continue to create uncertainty for energy markets and global trade routes.

Impact on shipping 

For food businesses, the main risk is that escalating conflict disrupts vital shipping routes, adding cost and delay to global supply chains. 

For now, shipping in the Bab-el-Mandab area continues. This is important  because 10-15% of global shipping passes through the area, including many oil and gas tankers.  

However, if the perceived risk rises, shipping businesses may re-route via the Cape of Good Hope, as they have done previously. This would add weeks of delay to shipping and push costs up. Latest geopolitical events have underlined major changes in the strategic landscape over recent years. 

The relationship between the US and its traditional allies has become less predictable. Domestic political pressures and an "America First" approach are leading the US to take positions that do not always align with those of European partners. 

Also, modern technology,  especially drones, allow non-state actors such as the Houthis to threaten trade and, effectively to control trade bottlenecks such as the Bal-El-Mandab. 

Cyber risks become physical 

This week has also demonstrated that disruption can come from unexpected sources and move rapidly from digital systems into physical food operations. 

Hackers reportedly targeted supermarket refrigeration systems in France, causing refrigerators and freezers to overheat. The attack led to food spoilage, disruption and fires, turning equipment designed to protect products into a direct operational risk. 

The incident demonstrates that cyber risk is no longer limited to data, payments or online services. Connected equipment and shared technology providers can expose multiple sites and businesses to physical disruption at the same time. 

Why should food and drink businesses care? 

The central lesson from this week is that food businesses are operating in a more dynamic risk environment, in which geopolitical, economic, technological and climate risks increasingly overlap. 

The greatest concern is not any single event, but the speed at which different risks can combine and spread through energy, transport and food supply chains. 

Geopolitics received the highest risk score in IGD's latest resilience survey, reflecting growing concern about the impact of global tensions on food system resilience. 

The most obvious connection is through global energy prices. Energy is a key input for most businesses, and any sustained cost impact must eventually be passed on to shoppers. 

Shoppers themselves are also affected. Higher prices for motor fuel and domestic energy are likely to mean lower confidence and weaker demand, even for essentials, creating a more difficult operating environment. 

The latest changes suggest that energy prices could fall if the US-Russia deal delivers additional supply.  But they could just as easily rise again, if the deal falls through, deliveries are disrupted or another event intervenes. A bilateral deal is no substitute for peace and stability. 

What are the biggest risks for food businesses? 

The biggest risk is the layering of pressures that would previously have been considered separately.  

Geopolitical risks are combining with extreme climate events and technological vulnerabilities. This convergence is likely to make each disruption harder to anticipate and manage. 

Beyond this, the global situation is likely to have two other consequences. First, lower confidence among investors, potentially affecting investment and share prices. 

Second, lower economic growth and prosperity more generally. Forecasts for global and national economic performance in 2026 and 2027 may be reduced, with the expected timeline for recovery pushed back again.  

What should food leaders do next? 

For the UK food industry, this week’s events reinforce the need to prepare for several risks moving at once, rather than planning for individual threats in isolation. 

The US-Russia diesel deal could provide some relief if additional supplies are delivered, but any benefit could quickly be offset by conflict, shipping disruption or another unexpected event.  

Food leaders should watch global energy markets, the security of critical trade routes and the growing vulnerability of connected physical infrastructure to cyberattacks 

The practical priority is to understand how energy, trade, technology and climate risks interact, and build the flexibility to respond when conditions change. 

To explore how the industry can strengthen UK food-system resilience, join food-system leaders at IGD Future of the UK Food System 2026 on 21 October. The event will examine the decisions shaping resilience, growth, productivity and investment across UK food.