The war in the Middle East drives the demand for biofuels

The accelerated rise in oil prices, generated by the conflict between the USA and Israel against Iran, has led to an increase in the demand for biofuels, in a context where fears related to the shortage of fossil fuels surpass concerns about the impact on food prices.

Geopolitical tensions have disrupted global oil and gas supply, and crude oil prices have risen by over 30% since the end of February. In comparison, the price of corn, a key raw material for biofuels, has seen a modest increase of about 5%. Against the backdrop of rising fossil fuel prices, biofuels are becoming a more affordable alternative and help to temper pump prices.

Asian states, heavily dependent on oil imports, are accelerating the transition to biofuels to limit the economic effects of the conflict. However, this trend brings back to the forefront concerns related to food security, given that a significant portion of grain production is directed towards energy production. Although global grain stocks are currently consistent, a sustained increase in demand for biofuels could put pressure on food prices.

At the level of the European Union, there are strict regulations regarding the use of biofuels, while in the United States, previous policies have favored their integration into the refining process.