US-Iran Conflict Impacts Vegetable Oil Market, Palm Oil Prices Hit Nearly One-Month High
Crude oil and other vegetable oil prices have strengthened, pushing palm oil prices to nearly a one-month high.
According to Zhihui Finance APP, as military tensions between the United States and Iran continue to escalate, crude oil and other vegetable oil prices have strengthened, pushing palm oil prices to nearly a one-month high.
Kuala Lumpur palm oil futures rose by 0.7% to 4,635 ringgit per ton, marking the highest level since June 23. Previously, as the US-Iran military conflict intensified, Brent crude oil prices surged, leading to an increase in palm oil prices as well. In the past week, clashes between the US and Iran have spread beyond strictly military targets, also impacting bridges, utilities, and port facilities. The fragile ceasefire agreed upon last month now has virtually no prospect of being resumed in the short term.
Palm oil is the world’s most produced vegetable oil, widely used in food processing, daily chemical industries, and biofuels. The recent rise in international oil prices has further highlighted palm oil’s energy-related attributes.
Satya Varqa, Senior Analyst at Fast Markets Palm Oil Analytics, stated: “The ongoing escalation in the Middle East has driven a rebound in crude oil prices and increased war risk premiums, providing upward support for palm oil.” He added that vegetable oil futures on the Chicago and Dalian exchanges have also surged significantly, further driving up palm oil prices.
As military conflict between US forces and Iran reignites, the Strait of Hormuz is once again in crisis. Reports cite sources saying that traffic volume in the Strait of Hormuz has dropped to zero; as long as the US continues its provocative actions, the strait will remain closed, and Iran will not grant passage permits to any vessels. Capital Economics warned that if the Strait of Hormuz remains closed for an extended period, the price of Brent crude oil could soar to $150 per barrel.
As of press time, the price of WTI crude oil futures had risen by 2.75% to $84.03 per barrel; Brent crude oil futures increased by 3.12% to $90.85 per barrel.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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