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Soaring oil prices in the wake of the U.S.-Israeli war on Iran are driving renewed demand for biofuels as the need to tackle a fossil fuel shortage outweighs concerns that using crops for fuel will drive up food prices.
The conflict has disrupted about 20% of the world’s oil and gas supplies, which typically pass through the Strait of Hormuz in the Middle East Gulf. Crude prices are up more than 30% since late February, before the war started. In contrast, prices for corn , a key biofuel ingredient, have risen just 5%.
Biofuels, made from any organic feedstock, are usually blended into gasoline or used to replace diesel. They become more economical when fossil fuel prices rise. They can also help keep prices down at the pump and reduce dependency on costly crude oil and fuel imports.
Countries in Asia, heavily dependent on Middle East oil imports, have sought to increase biofuel use since the war began. Asia buys about 80% of the oil shipped through the Strait of Hormuz, which has largely been closed to shipping since the conflict began.
Vietnam said in late March it would switch fully to ethanol-blended gasoline from April due to the energy price surge, bringing forward a previous target of June 1. Ethanol is produced mostly from corn or sugarcane.
Indonesia has said it will raise the mandatory blending rate for biodiesel made from palm oil to 50% from 40%. Indonesia is the world’s largest producer and exporter of palm oil.
«In Asia, countries do look at biofuels that can be produced from locally sourced feedstocks as they can reach two goals at once – limit energy imports and increase profitability for farmers», — Kpler biofuels analyst Beata Wojtkowska said.
Asian countries are trying to soften the impact on their economies of the war-induced energy price surge with measures like fuel rationing, shorter work weeks and alternating driving days.
«I expect the crisis to give the Asian biofuel sector a boost», — International Sugar Organization senior economist Peter de Klerk said, adding that India was planning to increase the amount of ethanol blended into gasoline, while Thailand was also looking at its ethanol options.
More details: https://www.reuters.com/business/energy/biofuels-back-vogue-iran-war-triggers-oil-price-surge-2026-04-21/