Are We Headed for a Global Recession, Food Shortages and Riots? Here’s What I’m Watching

With the Saudi pipeline being shut down, refineries in the Midwest dealing with outages, the war in Ukraine still hammering energy infrastructure, the Iran conflict disrupting Middle Eastern oil flows, and diesel prices surging here at home, I’ve been getting variations of the same question:

How bad could this actually get?
Are we looking at another recession, food shortages, food riots, or even a complete collapse of the system?

The risk has gone up quite a bit in the last couple of weeks, but I’d separate “serious economic/food-price crisis” from “complete collapse.” The first is absolutely plausible. The second still requires several additional things to break at the same time. And frankly, we don’t need some Mad Max collapse scenario for this to get extremely painful.

This Isn’t Just an Oil Story Anymore

The energy situation is genuinely ugly. The International Energy Agency’s September oil market report projects world oil supply averaging 5.7 million barrels per day less than in 2025. More importantly for the average American, though, the real problem is increasingly about refined products, especially diesel, rather than simply how many barrels of crude oil are sitting somewhere in the world.

That distinction matters because you don’t put crude oil into a semi truck, tractor, combine, delivery truck or refrigerated trailer. The modern economy runs on refined fuels, and diesel is buried inside almost every part of the system that grows, moves and delivers the things we need.

U.S. diesel prices have already pushed above $6 a gallon, while middle-distillate inventories are extremely low for this time of year. At the same time, diesel and gasoil supplies from the Gulf and Russia have been hammered by the Iran conflict, problems around the Strait of Hormuz, and Ukrainian attacks on Russian energy infrastructure.

Then several more problems landed on top of that. Saudi Arabia’s East-West pipeline was attacked and shut down. That pipeline is particularly important because it is one of Saudi Arabia’s main ways of moving crude to the Red Sea while bypassing the Strait of Hormuz. Reuters reported that Saudi crude loadings from Yanbu were suspended and some European cargoes canceled, with estimates for the pipeline disruption ranging from relatively quick repairs to an outage lasting several weeks. And just hours ago, the Saudis told European refiners they’ll get no crude next month.

At the same time, ExxonMobil’s Joliet, Illinois refinery remains offline following an initial power failure and subsequent flooding problem. That facility normally produces roughly 11 million gallons of gasoline and diesel every day, so this isn’t some tiny refinery that nobody is going to notice. It is a major supplier sitting right in the middle of the country at a time when refined-product supplies are already under pressure.

The IEA is now openly warning that if Gulf supplies remain constrained while commercial inventories continue falling, higher prices and additional “demand destruction” could be necessary to balance the market. Demand destruction is one of those nice economist phrases that sounds much less disturbing than what it actually means: prices get so high that people and businesses simply can’t afford to consume as much.

How Bad Could This Actually Get?

I wouldn’t put fake percentages on things like food riots or a total collapse because there isn’t enough information to calculate those odds credibly. But we can separate what is already happening from scenarios that would require several more things to go wrong.

There’s an important point here that gets lost whenever people start talking about “collapse.” There is an enormous amount of economic pain between normal life and society completely falling apart. We could have a nasty recession, another major inflationary wave, business failures, layoffs, $7 diesel and dramatically higher grocery bills without ever getting remotely close to the end of civilization.

In fact, that middle ground is what concerns me the most because it doesn’t require some unbelievable chain of events. It just requires the problems we already have to persist long enough that they start feeding into one another.

So Are We Heading Into a Global Recession?

Possibly, and I think the risk is considerably harder to dismiss than it was before this energy crisis intensified. But the world economy has actually absorbed the shock better than a lot of people expected so far, which is worth acknowledging. The IMF said in September that global economic growth for 2026 was still running around 3 percent, helped by reserves, alternative energy supplies and reduced demand.

That’s reassuring to a point, but those buffers aren’t infinite. Strategic reserves eventually have to be replenished, commercial inventories can only fall so far, and refineries can’t magically produce unlimited diesel. Throw winter demand into the equation and suddenly a manageable energy shock can become a much bigger economic problem.

The OECD has modeled a much uglier scenario if Gulf disruptions continue well into 2027. Under that scenario, global growth falls to around 1.8 percent in 2027, with OECD economies growing only around 0.5 percent. That isn’t societal collapse, but it would mean a lot of individual economies flirting with or entering recession while consumers are simultaneously dealing with expensive energy and expensive food.

The Part I’m Watching Closely Is Food

This is where I think people who only follow the price of crude oil are missing the bigger story. Diesel sits underneath an enormous portion of the food system, which means an extended diesel crisis doesn’t stay an energy story for very long.

Think about how food actually reaches your kitchen. A farmer uses diesel-powered equipment to prepare fields, plant crops and harvest them. Seed, fertilizer and animal feed have to be transported. Harvested food has to move from farms to processors. Processed food moves to warehouses. Refrigerated trucks carry perishable products around the country. Distribution centers move products again, and then another truck finally delivers everything to your local grocery store.

And that’s before we even talk about petrochemicals used in fertilizer, pesticides, plastics and food packaging. Energy is baked into almost everything sitting on a grocery-store shelf.

Does $6 or $7 Diesel Mean Grocery Stores Run Out of Food?

No, at least not by itself. Initially, it means everybody along that supply chain pays more. Farmers pay more, truckers pay more, food processors pay more, warehouses pay more and grocery distributors pay more. Some businesses absorb part of those costs, some operate on smaller margins, and others increase prices. Eventually, a substantial portion of those costs reaches you.

That’s why the most immediate threat isn’t necessarily empty shelves. It’s another major wave of food inflation hitting households that are already dealing with years of higher prices. But there is a point where a price problem can become an availability problem, and that’s where things become much more concerning.

How an Energy Crisis Could Become a Food Crisis

The progression I’d worry about looks something like this:

That last part matters more than people realize. Historically, food crises can become substantially worse when governments start protecting their own domestic supplies. Grain exports get restricted, fertilizer exports get restricted, fuel exports get restricted and governments start stockpiling commodities. A global market that was expensive but still functioning can suddenly become fragmented, and at that point availability starts becoming just as important as price.

Could We Actually See Food Riots?

In parts of the world that are heavily dependent on imported food and energy, prolonged shortages or massive price increases can absolutely contribute to political instability and civil unrest. The United States is in a much stronger position because we produce enormous quantities of food domestically and have a huge agricultural and transportation system. That’s why I would still consider widespread American food riots or the breakdown of normal food distribution a tail-risk scenario rather than the most likely outcome.

But you don’t need nationwide food riots for your family to have a serious problem. Imagine diesel stays around $6 or $7, oil remains above $100, refinery capacity stays impaired, transportation costs continue climbing and food inflation starts accelerating again. Now add rising unemployment because consumers are cutting spending and businesses are getting squeezed from both directions.

You could have grocery stores full of food while millions of people struggle to afford what is sitting on the shelves. You could have fuel available while independent trucking companies get crushed by operating costs. You could have farms producing plenty of food while farmers face dramatically higher costs for fuel, fertilizer, equipment and transportation. That is a very different situation from “America ran out of food,” but if you’re the family that can no longer afford the grocery bill, the distinction doesn’t feel particularly comforting.

What Would Make Me Much More Worried?

Instead of trying to predict the exact date civilization collapses, I’m watching specific indicators. Any one of these can probably be absorbed. The concern is what happens if several of them start occurring simultaneously.

If we start checking five or six of those boxes at the same time, then I think the conversation changes considerably. At that point, I’d be much more concerned that we were moving beyond an expensive but manageable energy shock and into a self-reinforcing economic crisis.

The distinction I’d pay particular attention to is price versus availability. Expensive diesel hurts like hell, but unavailable diesel is an entirely different problem. Expensive food creates hardship, but food that physically can’t get where it needs to go creates another level of instability.

We Don’t Need Mad Max for This to Get Bad

This is probably the biggest point I would make to anyone asking me whether they should be worried. There seems to be this idea that either everything is normal or we’re living in some post-apocalyptic wasteland, when the reality is that there is an enormous amount of misery between those two outcomes.

A country can have functioning electricity, functioning banks and grocery stores full of food while millions of families are getting financially destroyed. You can have diesel available at every truck stop while small trucking companies are going bankrupt because they can’t make the numbers work. You can have farms producing food while farmers are getting hammered by operating expenses, and you can have restaurants, manufacturers and small businesses closing because their costs have become impossible to absorb.

That’s why I think the more credible warning right now isn’t that America runs out of food next Tuesday. It’s that energy is a cost embedded in almost everything Americans buy, and diesel is embedded particularly deeply in the system that puts food on the shelf.

What Should You Actually Do?

This doesn’t mean running to Costco and buying twelve years of rice because you saw a scary headline. That’s panic buying, not preparedness. Preparedness means looking at the things your household already consumes and making sure you aren’t completely dependent on buying everything exactly when you need it.

Keep a reasonable reserve of the foods you actually eat and rotate through them. Have basic household supplies on hand before everyone suddenly decides they need the same things. Keep vehicles maintained, keep emergency equipment operational and pay attention to what is happening with fuel and transportation rather than waiting for shortages to become the lead story on the nightly news.

More importantly, watch the boring indicators: diesel inventories, refinery outages, freight rates, fertilizer prices, grain prices and food export restrictions. Those numbers will often tell you more about where this is heading than whatever political talking head happens to be screaming on television that night.

Where I Think We Are Right Now

I don’t think the evidence currently supports telling people that America is about to run out of food or that complete societal collapse is imminent. But I also think anyone looking at what is happening in global energy markets and dismissing it as another temporary spike in gasoline prices isn’t paying attention.

Saudi Arabia’s bypass pipeline has been attacked. The Strait of Hormuz has been disrupted. Russian energy infrastructure continues taking hits. A major Midwest refinery is offline. Diesel prices have surged. Distillate inventories are extremely tight.

Any one of those problems is manageable. What matters is what happens when several of them start stacking on top of one another and stay broken long enough to work their way through transportation, agriculture, manufacturing and eventually the price and availability of food.

That’s what I’m watching, and that’s why the time to prepare for an economic or supply-chain crisis is before everybody else decides there is one.