Soybean oil hits a more than three-year high as crude oil strengthens following Trump's escalation of threats against Iran

After U.S. President Donald Trump further threatened to destroy Iran’s infrastructure, crude oil prices rose, boosting the appeal of biofuels as a cheaper alternative and driving soybean oil futures to their highest level since November 2022.

On Tuesday, the benchmark soybean oil futures rose as much as 0.7%, to 70.4 cents per pound. Palm oil rose as much as 1%, approaching a 16-month high, before giving back some of its gains.

David Ng, a senior trader at IcebergX Sdn in Kuala Lumpur, said the rise in soybean oil was driven by market expectations: amid high crude oil prices, governments around the world may increase the biodiesel blending ratio. He said this rally also boosted optimism in the palm oil market.

After Trump escalated threats against Iran, crude oil prices rose for the third consecutive day. Trump set a deadline for Iran, demanding that it reach an agreement by 8 p.m. Tuesday evening Eastern Time that includes reopening the Strait of Hormuz. He threatened that if his demands were not met, infrastructure such as bridges and power plants would be destroyed.

Iran warned that if Trump truly launched attacks on civilian targets, Iran would also increase attacks on energy infrastructure in the Gulf region. This move could worsen global fuel shortages.

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Responsible editor: Jiang Xinsi