Asian biofuels prices rose March 2 due to concerns about supply disruption stemming from geopolitical tensions in the Middle East.

Ethanol

Platts, part of S&P Global Energy, assessed Asian fuel-grade ethanol up $8/cubic meter to $607/cubic meter CIF Philippines on March 2, while industrial-grade B increased $5/cubic meter to $620/cubic meter CFR Ulsan.

Market participants said it was too early to observe an immediate impact; however, increased freight costs and delivery delays could be anticipated. “The first thing expected,” said a Pakistan-based ethanol producer, referring to higher freight costs.

FOB Karachi ethanol prices rose across all grades as sellers tested higher levels. Extra neutral alcohol increased by $8/metric ton to $710/mt, industrial grade also climbed $8/mt to $697/mt and anhydrous was up $10/mt to $780/mt, according to Platts data.

“It is too early to tell what will happen to prices,” said another Pakistani producer. “But the length of the delays will be the key determinant.”

Vessel owners were seeking safer locations to anchor their vessels until peace is restored, said an ethanol trader.

Westward flows from Pakistan could be severely affected, while eastward trade may also be impacted by higher freight costs, according to the trader.

A South Korea-based trader said that Asian buyers were mostly covered for the second quarter, and that Brazilian supplies typically arrive via the Cape of Good Hope.

Palm oil

Crude palm oil futures on the Bursa Malaysia derivatives rose 2.6% to MR4,146/mt ($1,055.77/mt) at market close March 2. The increase was driven by a broader rise in the vegetable oil complex and higher crude oil prices following geopolitical tensions in the Middle East.

Platts assessed crude palm oil CFR West Coast India for March shipment at $1,150/mt on March 2, up $17.5/mt from the previous session.

Platts assessed CPO FOB Indonesia for March loading at $1,120/mt, up $20/mt during the day.

The impact on the Asian palm oil market appeared to be limited, with market participants adopting a wait-and-see approach.

“For palm shipments into India, the direct impact is limited at this stage since most movements are [from] Malaysia/Indonesia to India via open Indian Ocean routes without Hormuz exposure,” an India-based freight broker said.

“However, if Gulf transits remain risk-priced or restricted, we could see secondary tightening in the wider Indian Ocean tanker pool as owners reposition or avoid Middle East loadings,” the broker said. “That would be the channel through which freight could firm.”

In the rival oil market, soybean oil freight rates to India increased by about $8/mt to $80/mt from North American origins, according to two India-based edible oil brokers.

Market participants said higher freight costs on soybean oil may discourage purchases, thereby supporting demand for palm oil.

SAF

Platts assessed sustainable aviation fuel FOB Straits prices at $2,150/mt, up $80/mt from Feb. 27.

The SAF FOB Straits premium was assessed at $1,253.75/mt over Platts Jet Fuel/Kerosene FOB Singapore forward curve, down $89.00/mt from Feb. 27.

Market participants said the impact of geopolitical tensions on the Asian SAF markets was expected to be limited.

A China-based broker said he does not anticipate significant price fluctuations in Asia in the near term, adding that most market participants are simply monitoring regional developments.

“I do not think SAF prices [in Asia] are massively correlated with jet fuel prices. Refineries here have sufficient inventory levels to hold off for about two weeks, and until then, I think the impact is limited,” the broker said.

Another China-based producer said higher oil prices could curb consumption, and that, in theory, demand for blending could also decrease in the near term.

Bio-bunkers

Singapore biobunker outright prices rose sharply, driven by stronger fuel oil cargo prices.

While potential supply disruptions remain a concern for conventional fuel oil blending components, supply risks for biobunkers were moderate as the biofuel component — used cooking oil methyl ester — primarily originates in China, a trader said.

Additionally, a supplier said cargo flows from the Middle East are predominantly high-sulfur fuel oil, which constitutes a smaller share of the biobunker supply pool than LSFO bio-blends.

In 2025, bio-blended HSFO volumes accounted for 26.3% of total biobunker sales in Singapore, according to data from the Maritime and Port Authority of Singapore.

While some biobunker suppliers have factored in recent uncertainty and maintained elevated offer levels, certain shipping companies continued to actively purchase biobunkers in the spot market.

“Our Singapore spot demand today was largely unaffected, and demand is likely to increase going forward, before further crude oil price surges and tightening [supply],” a biobunker procurer at a shipping company said.

In the broader bunker market in Singapore, a supplier said, some bunker demand could shift from Fujairah to Singapore. However, the impact on the Singapore biobunker market is expected to be limited, given the currently low level of biobunkering activity in the Middle East.

Platts assessed Singapore-delivered B24 and B30 low-sulfur biobunkers at $775.38/mt and $816.38/mt, up $52.21/mt and $49.21/mt, respectively, on March 2.

Platts assessed Singapore-delivered B24 and B30 high-sulfur biobunkers at $722.10/mt and $765.10/mt, respectively, both up $68.44/mt on March 2.

UCO

Post-Lunar New Year demand has fueled a rebound in the Asian UCO market. Meanwhile, heightened geopolitical tensions in Iran have added uncertainty to FOB pricing amid elevated freight rates.

Chinese domestic UCO prices remained stable, largely supported by steady SAF plant demand.

Market participants adopted a wait-and-see approach, with sellers anticipating that buyers would accept higher prices amid supply concerns and increased freight costs.
Source: Platts