When news broke that the Donald Trump administration and Iran had agreed to a two-week ceasefire, markets reacted instantly. Oil prices plunged within minutes, wiping out days of gains and triggering a wave of optimism. For many consumers, the assumption seemed obvious: lower oil prices should mean lower food prices.

That assumption is fundamentally flawed.

CHARLEBOIS: Why a ceasefire won’t cool your grocery bill Back to video

What matters for food prices is not the direction of oil markets in a given moment — it is volatility. And right now, volatility is acting as a hidden tax on the entire food supply chain.

Since Jan. 7, when West Texas Intermediate (WTI) crude was trading at roughly US$55 per barrel, oil markets have experienced extreme swings. Prices surged as high as $116 this week amid geopolitical tensions, with some forecasts suggesting a potential spike to $200. Then, almost instantly, prices fell back below $100 following the ceasefire announcement.

At first glance, such a drop appears to be good news. In practice, it creates a far more complex — and troubling — dynamic for food distribution.

Food logistics systems do not operate on daily spot prices. They operate on risk.

Consumers........

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