The ongoing conflict involving Iran is beginning to create ripple effects far beyond global oil markets, with renewed pressure now emerging across agricultural, logistics and biofuel supply chains.
As fears around disruption in the Strait of Hormuz continue to drive volatility in crude oil prices, governments and energy markets are once again turning towards biofuels as a way to strengthen fuel security and reduce dependence on imported fossil fuels. The renewed demand is already pushing up interest in crops including soybeans, corn, sugar cane and palm oil, all of which are widely used in the production of biodiesel and ethanol.
According to analysis, soybean oil prices have climbed sharply in recent months as rising oil prices make biodiesel more commercially attractive. At the same time, corn markets are also strengthening as countries increase demand for ethanol blending.
The situation highlights how quickly geopolitical instability can reshape the sustainability conversation across transport and logistics.
Aviation turning to SAF
Much of the recent momentum is also being driven by the aviation sector, where demand for Sustainable Aviation Fuel (SAF) continues to rise rapidly as airlines attempt to reduce lifecycle emissions ahead of tightening international regulations.
SAF can be used within existing engines and airport infrastructure, making it one of the few immediately deployable decarbonisation tools currently available for long haul aviation. As a result, airlines, fuel producers and logistics providers are accelerating investment into alternative fuel supply chains.
However, the rapid expansion of SAF production is also contributing to growing competition for biofuel feedstocks globally. Soybean oil, used cooking oil and agricultural waste streams are increasingly being viewed as strategic resources across aviation, shipping and heavy transport sectors.
According to the International Energy Agency, biofuels will remain critical for hard to electrify sectors including aviation, shipping and long haul freight, although future growth will increasingly depend on waste derived and non-food based feedstocks to avoid wider environmental pressures.
Food and Fuel Pressures
Biofuels are typically produced using agricultural crops rather than fossil hydrocarbons. Corn is widely used to produce ethanol for petrol blending, while soybean oil has become one of the dominant feedstocks for renewable diesel and biodiesel production. Palm oil and sugar cane also continue to play major roles in global biofuel markets.
As oil prices rise, demand for these crops often increases because biofuels become more economically competitive against traditional diesel and petrol. That dynamic is now accelerating amid concerns over energy security linked to the Iran conflict.
In the United States, soybean oil futures are approaching multi year highs as investors anticipate stronger renewable diesel demand and increased government blending mandates.
Yet the growing appetite for crop-based fuels is also reigniting concerns around food inflation and land use.
Environmental analysts and agricultural economists continue to warn that diverting large volumes of crops into fuel production could place additional strain on global food systems, particularly during periods of geopolitical instability and disrupted supply chains.
The wider pressure on logistics and supply chains
The impact is not limited to fuel markets alone. Fertiliser supply chains are also coming under pressure as trade routes through the Middle East face disruption.
Industry analysts have warned that rising fertiliser costs linked to the Iran conflict could influence future planting decisions, with some US farmers already expected to shift acreage away from nitrogen intensive crops such as corn towards soybeans, which require lower fertiliser input.
That shift could have significant implications for both food production and renewable fuel markets over the coming years.
At the same time, countries including Indonesia, Malaysia and Brazil are continuing to increase domestic biofuel mandates in an effort to reduce exposure to volatile fossil fuel imports.
For logistics operators, the conversation around biofuels is becoming increasingly complex. Freight companies are under pressure to decarbonise operations while balancing fuel availability, operating costs and long term supply resilience.
The growth of SAF, renewable diesel and alternative marine fuels is expected to remain central to the transition strategy for sectors where full electrification is still operationally difficult. However, ensuring those fuels can scale sustainably is rapidly becoming one of the defining challenges facing the wider transport industry.
For the logistics sector, the current situation reflects the increasingly interconnected nature of energy, agriculture and global supply chains. What began as a conversation around decarbonisation is now becoming equally tied to geopolitics, food security and industrial resilience.
The next phase of the energy transition will not simply depend on replacing fossil fuels with alternatives. It will also depend on how sustainably those alternatives can scale during periods of global uncertainty and the wider focus on long-term risk mitigation.