Middle East Tensions Escalate, Energy Prices Fluctuate: Palm Oil Rises to One-Month High on Crude Oil Momentum

With military tensions in the Middle East escalating sharply and other vegetable oils strengthening, palm oil prices have risen to their highest level in nearly a month.

Hostilities between the United States and Iran have intensified, expanding military conflicts from specific military targets to bridges, utilities, and port facilities. Market expectations for a return to ceasefire agreements in the Middle East have cooled, and supply chain concerns have deepened. As a result, Brent crude oil prices surged over 11% this week, briefly surpassing $85 per barrel—the first time in nearly a month—with subsequent reports indicating it has broken the $90 threshold.

This crude oil rally was primarily triggered by a new round of U.S. strikes on Iran and President Trump's renewed blockade of Iranian vessels transiting the Strait of Hormuz, sparking market fears of a global shortage of fossil fuels.

The strong rebound in crude oil prices has directly boosted optimism in the palm oil market. Kuala Lumpur palm oil futures rose for two consecutive days, briefly touching 4,653 Malaysian ringgit per ton—the highest level in nearly a month. Analysts note that sustained high crude prices improve the demand outlook for biofuels, of which palm oil is a key feedstock.

Additionally, Indonesia’s recently implemented B50 biodiesel program and Malaysia’s B15 blending policy are expected to consume large portions of supply from the world’s two largest producers, further pushing up prices of tropical oils.

Market experts say the current price surge reflects the return of a 'war risk premium.' At the same time, rising prices of other vegetable oils (such as soybean oil) on the Chicago and Dalian exchanges have also provided support for palm oil.