Reuters: Biofuels “back in vogue” amid Iran war and oil price surge

Rising oil prices driven by the US and Israel’s war against Iran are boosting interest in biofuels, which are increasingly seen as more economically viable than conventional fuels.

The conflict has disrupted a significant portion of oil and gas supplies passing through the Strait of Hormuz, pushing global oil prices up by more than 30% since late February, Reuters reports.

At the same time, the price of a key biofuel feedstock, corn, has increased by only around 5%.

Asian countries increasingly view biofuels produced from crops as an alternative to expensive oil imports.

The region, which depends heavily on supplies routed through the Strait of Hormuz, has already begun expanding their use.

Vietnam has accelerated its transition to gasoline blended with ethanol, while Indonesia has raised its mandatory biodiesel blend from palm oil to 50%.

Similar measures are being discussed in India and Thailand.

Analysts say biofuels help reduce dependence on energy imports and support domestic agriculture, but they also raise concerns about potential impacts on food prices.

The “food versus fuel” debate previously emerged during the 2007–2008 crisis, although experts note that global grain stocks are currently sufficient, helping to limit pressure on food prices.

Nevertheless, the biofuel sector could expand further in the coming years, as its share of global transport fuel consumption remains relatively small.

By Bakhtiyar Abbasov