Kuala lumpur: Prolonged conflict in the Middle East could sustain a price floor for crude oil through 2026, lending underlying support to palm oil prices and reinforcing firmer trends across the global edible oils market.
According to BERNAMA News Agency, Malaysian Palm Oil Council (MPOC) chief executive officer Belvinder Kaur Sron noted that elevated crude oil prices typically spill over into edible oil markets, including palm oil, given palm oil's role as a biodiesel feedstock.
She explained that a large share of crude oil exports from producing countries transits the Strait of Hormuz, a critical chokepoint in global energy trade. Belvinder highlighted that any disruption to shipping through the strait could affect more than 20 per cent of global crude oil supply, pushing crude oil prices higher.
'Such logistical disruption could also delay palm oil shipments to the Middle Eastern markets such as the United Arab Emirates, Iraq, Kuwait, Qatar, and Bahrain,' she told Bernama. 'However, the supply impact would likely be localized, mainly affecting deliveries into these destinations rather than tightening overall global palm oil supply,' she added.
She further mentioned that instability in the Middle East remains a geopolitical risk, and episodes of tension can quickly transmit shocks through global energy markets, war-risk insurance premiums, and key maritime trade routes. However, while short-term increases in freight rates and war-risk insurance premiums may occur, the direct exposure of Malaysian palm oil exports to the affected region remains manageable, said Belvinder.
She elaborated, 'The resulting increases in freight rates and potential disruptions to shipping schedules place immediate pressure on supply chains. These dynamics can cascade into higher logistics and production costs, tighter trade finance conditions, and broader inflationary pressures -- ultimately affecting industrial competitiveness and the affordability of essential commodities, including edible oils and manufactured food products.'
Belvinder also noted that MPOC has consistently advanced efforts to expand market access and diversify demand for Malaysian palm oil, reducing reliance on any single market and enhancing resilience in the face of geopolitical disruptions. 'We are strengthening (palm oil) presence across Asia, Africa, the Americas, and other growth regions, while also promoting downstream development in higher-value segments such as specialty fats, oleochemicals, and nutraceuticals,' she added.
Malaysia's total exports of palm oil and palm-based products in 2025 amounted to 24.83 million tonnes, of which 1.34 million tonnes were shipped to the Middle East (excluding Turkiye), representing approximately five per cent of overall exports.