Oil prices rose “only” 7% on Monday, though increasing chaos is pushing up vegetable oil prices

Forecasts of oil prices rising to $90-100/barrel at the opening of the stock exchanges on Monday did not materialize, as the US and Israel continued to strike Iranian military facilities to deprive it of the ability to close the Strait of Hormuz.

 

May Brent crude futures rose 6.9% yesterday to an 8-month high of $78/barrel, after reaching $80-82/barrel during the day. Markets expect that traffic through the strait will not be blocked and will resume quickly.

 

US Central Command stated that “two days ago Iran had 11 ships in the Gulf of Oman, and now there are ZERO. The Iranian regime has harassed and attacked international shipping in the Gulf of Oman for decades, but those days are over. Freedom of navigation has been the foundation of America’s and the world’s economic prosperity for over 80 years.”

 

Iran, in response to the attack, unexpectedly for the US and Israel, attacked 14 neighboring countries with drones and missiles, trying to get a military response from Saudi Arabia and drag it into the war, thus uniting the Iranian people to defend the country from external enemies and preventing them from rallying to overthrow the Ayatollah's regime.

 

Iran's attack on a liquefied natural gas plant in Qatar has halted production and sent gas prices soaring to a 19-month high.

 

On the night of March 2, 2026, one of the most protected areas of the Russian Federation - the port of Novorossiysk - was successfully attacked by the Ukrainian Defense Forces, which damaged the Sheskharis transshipment complex (a structure of Chornomortransnafta JSC, a subsidiary of Transnafta). This will limit the Russian Federation's ability to export oil and receive additional profits from rising oil prices.

 

Rising oil prices have supported vegetable oil prices, but further increases will limit the decline in consumer demand in recent months.

 

Following oil prices, May palm oil futures on Bursa Malaysia rose 2.6% to 4,147 ringgit/t or $1,085/t yesterday, but further gains are limited by a sharp 21.5-25.5% decline in February exports compared to January.

 

At the same time, Indonesia increased its palm oil exports to 2.24 million tons in January, which was 77% higher than the figure for January 2025.

 

March soybean oil futures on the Chicago SWOT futures exchange rose 1.5% to $1,372/t on Monday (+4.9% for the week, +14% for the month), but their further rise is limited by the increase in the supply of new crop soybean oil from South America. Soybean oil prices are supported by expectations that the US government will redistribute more quotas than the market expected.

 

Soybean oil prices in Dalian (China) remain low at $1,200-1,210/t, and reports of Indian buyers rejecting 75,000-120,000 t of Argentine and Brazilian soybean oil (as domestic prices are now $30/t lower than contract prices) have added to the pressure on prices. According to Platts, as of February 26, crude palm oil CFR WC India was $1,132.5/t, crude palm oil FOB Indonesia was $1,110/t, and soybean oil in Argentina on a FOB Up River basis was $1,114.66/t.

 

In India, sunflower oil prices fell by another $10/t during the week to $1,390-1,400/t CIF Mumbai, which led to a drop in prices for Russian and Ukrainian sunflower oil to $1,280-1,300/t FOB.

 

The increase in exchange prices for related oils will support sunflower oil prices, but the increase in freight costs due to the blockade of the Strait of Hormuz will limit the increase in prices for exporters.

 

The Persian Gulf countries import about 5 million tons of vegetable oils each year, so a war with Iran could lead to a halt in supplies to the region, which would also limit demand in the coming weeks.