A two-week ceasefire agreement between the United States and Iran, announced on April 8, triggered a sharp decline in Brent crude oil, sending immediate pressure across the vegetable oil complex.
Brent crude falls sharply
Brent crude (June contract) was trading at around $93-94 per barrel at time of writing, compared to the previous session’s close of approximately $109 per barrel, following an agreement on a temporary ceasefire and the reopening of the Strait of Hormuz. The conflict is not over, and markets are closely watching negotiations expected to continue over the next 15 days.
Palm oil under near-term pressure, but medium-term factors remain supportive
BMD crude palm oil was trading at MYR 4,604/mt in today’s session, down from MYR 4,765/mt the previous day.
Several medium-term developments, however, remain relevant. Malaysian stocks declined an estimated 19% month on month in March to 2.19 million mt, the lowest level in eight months, driven by a 37% increase in exports. Indonesia confirmed it will officially implement its B50 biodiesel programme on July 1 following successful technical tests. GAPKI estimates the rollout could reduce palm oil available for export by 2 million mt in 2026 due to higher domestic consumption.
Malaysia is also planning to expand its B20 biodiesel programme nationwide in phases, and Thailand has indicated it may limit palm oil exports.
Soybean, rapeseed, and sunflower oils follow crude lower
CBOT soybean oil, which had been supported by elevated Brent crude in the preceding session, was expected to move lower in line with the crude decline. Global soybean ending stocks are projected to decline to 121 million mt from 123.5 million mt a year earlier, though stock levels remain relatively high overall.
For rapeseed oil, global rapeseed and canola production is forecast to reach a new record of 86.72 mmt, according to Oil World, compared to 85.60 mmt last year. Anticipation around Germany potentially abolishing double counting for biofuel production has provided some sentiment support, though no official confirmation has been issued.
Global sunflower planting area has been revised to around 34.1 million hectares, a new record. Oil World projects 2025/26 production at 62-63 mmt, up from 56.9 mmt last season, with Strategie Grains estimating 64.5 mmt.
Outlook
The near-term direction for all vegetable oils will largely depend on how ceasefire negotiations develop. If the conflict subsides, further price pressure across the complex is possible, though analysts note prices may not return fully to pre-war levels given biofuel programmes and expectations that Brent crude could remain above pre-war levels due to infrastructure damage. Palm oil in particular has medium-term bullish factors from B50 implementation and declining Malaysian stocks, with a seasonal recovery expected in H2 2026.
The full vegetable oils analysis is available on the Vesper platform: https://app.vespertool.com/market-analysis/2869
