Authorities Tout Biofuel as Global Oil Prices Soar

March 06, 2026

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by Yuthana Praiwan (Bangkok Post) ... Energy authorities are stepping up efforts to expand biofuel usage to reduce reliance on oil imports and safeguard against potential fuel shortages.

The move comes as global oil prices surge, driven by the ongoing conflict between the United States, Israel and Iran.

Officials are also considering reviving the historic “han song (meaning divided by two)” energy conservation campaign, which decades ago encouraged households and businesses to cut energy consumption.

Biofuel boost

Veerapat Kiatfuengfoo, energy deputy permanent secretary, said a special panel had been established to address energy security concerns. The panel is tasked with finding ways to extend the country’s oil reserves by increasing the blending of biofuels with petrol and diesel.

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To maximise the reserves, officials are promoting greater use of biofuels — ethanol derived from molasses and cassava, and methyl ester produced from palm oil.

Diesel sold in Thailand is blended with 5% methyl ester (B5), while petrol is mixed with ethanol at levels of 10% (E10) and 20% (E20).

Authorities are considering raising the methyl-ester proportion in diesel to 10%, though this measure will only be implemented if oil prices climb above US$90 per barrel.

Currently, the price of methyl ester stands at 35 baht per litre, compared to the ex-refinery price of diesel at 20 baht per litre.

For petrol, the department plans to encourage wider adoption of E20 gasohol.

This initiative aligns with a proposal from Global Green Chemicals Plc (GGC), the biochemical arm of PTT Global Chemical Plc, which has urged Thailand to reduce dependence on fossil fuels.

“We expect agricultural produce to help Thailand get through this energy crisis,” said Kridsada Prasertsuko, managing director of GGC.

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However, ethanol prices remain high at 17 to 18 baht per litre, compared with 20 baht per litre for petrol, which is the ex-refinery price before levies and taxes.

To make E20 more attractive, the department proposed using the Oil Fuel Fund to subsidise its price, nudging motorists to switch from E10.

Most vehicles compatible with E20 are models manufactured from 2007-2008 onwards, particularly eco cars and newer models produced after 2010. READ MORE

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Calls for a national ethanol mandate to prevent future Iran war-style oil shocks (ABC Rural)
Crop Prices Jump as War Snarls Trade and Risks Tightening Supply (Bloomberg)
First Thing Today | Grain markets rally as crude oil soars past $100 a barrel (Pro Farmer)
Prolonged Iran War Could Shrink US Corn Acres, Analysts Say (Illinois Farm Policy News)
Why high oil prices may outlast Trump’s Iran war -- Tanker backlogs, damaged energy infrastructure and threats in the Strait of Hormuz could keep gasoline prices elevated. (E&E News Climatewire)
How the Iran war could hit gas prices, airfare and everyday costs (Washington Post)
Thailand moves to stabilize fuel prices, promote biofuels as global energy pressure mounts (Pattaya Mail)
Fuel panic spreads as pumps run dry -- Thailand's energy challenges are mounting as war rages in the Middle East (Bangkok Post)
THAILAND TO INTRODUCE 'FUEL NOW' APP FOR REAL-TIME PETROL STATION UPDATES (Bernama)
Brazil has a secret weapon against oil shocks -- Biofuels will help the country fend off the effects of conflict in the Middle East (The Economist)

Excerpt from ABC Rural: In short:

The escalating conflict in Iran has seen hundreds of oil tankers stranded in the closed Strait of Hormuz.

Australia's sugar industry says a national ethanol mandate would help shield motorists from rising prices.

The federal government has already pledged $1.1 billion to accelerate the production of low-carbon liquid fuels in Australia.

As the war in Iran intensifies, Australia's sugar industry says a national ethanol mandate could help shield motorists from future market shocks.

Retail fuel prices surged just days after the conflict started, prompting criticism from peak motoring bodies and catching the attention of the consumer watchdog.

But as Energy Minister Chris Bowen assured motorists there was no need to panic buy the Australian Sugar Manufacturers chief executive Ash Salardini said the vulnerability at the heart of the country's fuel supplies had been exposed.

"Australia probably has some of the lowest reserves of liquid fuel in the world," he said.

"We have about 30 days of diesel and 30 days of petrol, and similar amounts for aviation fuel as well."

Along with other members of the sugar industry he has called for a national mandate to drive more fuel production at home.

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Currently only New South Wales and Queensland require fuel suppliers to blend it into unleaded petrol or diesel.

They are also the states home to the two largest ethanol suppliers — grain producer Manildra Group and Wilmar Sugar and Renewables.

A national mandate would extend that requirement to retailers in all states and while that would not eliminate Australia's need to import fuel, Mr Salardini said it would reduce the volume.

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Wilmar Sugar and Renewables' parent company is headquartered in Singapore.

The tiny nation supplies the bulk of Australia's liquid fuels, though South Korea, China and Japan are also key sources.

The company's distillery at Sarina in North Queensland produces about 60 million litres of bioethanol a year, but even general manager James Wallace said it runs below capacity.

"We've got to look at the economics of our facilities and at the moment it isn't economical for us to continue to make more ethanol," he said.

"With the lack of government support, policy and mandate there is no money in our ethanol production at the moment."

The company sources the molasses for the distillery from its eight sugar mills, like the Invicta Mill at Giru, south of Townsville.

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When NSW introduced its ethanol mandate in 2007, then-prime minister John Howard ruled out taking it national.

Almost two decades later and with a fifth of the world's oil supply stranded in the Strait of Hormuz, Member for Kennedy Bob Katter asked the current prime minister if he would reconsider.

"Fuel security is really important, and it's essential as well that we make more things here," Mr Albanese told parliament.

"The principle … that we need to be more resilient and more self-reliant here is not only something that I support in theory, we are putting it in place in practice."

Last year the federal government announced it would invest $1.1 billion to accelerate the production of low-carbon liquid fuels in Australia. READ MORE

Excerpt from Bloomberg: Disruptions to crude oil supplies wrought by the conflict are boosting the appeal of crop-based biofuels, lifting demand for vegetable oils and corn. The effective closure of the Strait of Hormuz — a major conduit for the fertilizer trade — has also sent crop nutrient prices soaring as farmers rush to secure supplies. At the same time, wartime food security concerns may prompt some countries to build stockpiles of staples such as wheat.

Palm oil initially jumped as much as 10% — the most since 2022 — before paring some gains. Chicago futures of soybean oil, palm’s closest substitute, rose as much as 5%, up for an 11th day and headed for the longest run of gains since 2008. Wheat, corn and soybean prices also climbed higher.

Chicago Soyoil Surges as Iran War Boosts Biofuel Demand

Conflict threatens tighter supply across agricultural markets READ MORE

Excerpt from Pro Farmer: War in Iran raises crop prices worldwide… ”Palm oil prices surged as much as 10%, soybean oil jumped and wheat neared a two-year peak as the war in the Middle East drove energy and fertilizer costs higher and threatened to tighten supplies across agricultural markets,” Bloomberg reported overnight. “Disruptions to crude oil supplies wrought by the conflict are boosting the appeal of crop-based biofuels, lifting demand for vegetable oils and corn. The effective closure of the Strait of Hormuz — a major conduit for the fertilizer trade — has also led to a spike in the price of crop nutrients as farmers rush to secure supply. In addition, wartime food security concerns could spark some countries to stock up on staples like wheat,” said the report. Palm oil prices jumped the most since 2022, when top grower Indonesia halted exports. “Grain and oilseed markets are following energy in early Monday trading,” said Joe Davis, director at Futures International, a brokerage. “The macro and energy markets will continue to lead ag commodities on any escalation of the war on Iran,” he said and as reported by Bloomberg. Vegetable oils and meal in China also surged on Monday. The most actively traded soybean meal futures on the Dalian Commodity Exchange rallied as much as 6% to 3,066 yuan per ton while palm also rose to hit a daily limit. Rapeseed oil and meal did the same in Zhengzhou.

Stagflation concerns grip stock, financial markets… Optimism for a quick resolution of the conflict in the Middle East is rapidly ebbing in financial markets, with investors pricing in a deeper and longer-lasting supply shock, Bloomberg reports. “The shift in market sentiment gathered pace after President Trump said parts of Iran had yet to be attacked and that $100 crude was ‘a very small price to pay’ for ‘safety and peace,’ undercutting hopes the conflict would be relatively contained. Investors have had to increase their probability of the worst-case scenario, with the challenge being the stagflationary nature of the shock, and are now bracing for a long winter with no clear timeline of an end to it,” said the report. Meantime, International Monetary Fund Managing Director Kristalina Georgieva said lengthy hostilities in the Middle East would risk hitting markets and economies, while throwing up unexpected challenges that require policymakers to prepare for a “new normal.” Georgieva said a 10% increase in energy prices persisting for a year would push global inflation up by 40 basis points and slow economic growth. READ MORE

Excerpt from Illinois Farm Policy News Summary: Reuters’ Naveen Thukral and Ed White reported that “the world’s farmers face soaring fertilizer and fuel prices as the war in the Middle East escalates, leaving some scrambling for supplies as the spring planting season approaches.”

“Prices in the United States, which imports much of its fertilizer ⁠needs despite a large domestic industry, rose at the war’s outbreak,” Thukral and White reported. “Prices for fertilizer jumped from $516 per metric ton on Friday to up to $683 at the import hub of New Orleans on Thursday. Prices could jump higher if the Persian Gulf closure persists and shipments can’t make it in time for spring planting, analysts told Reuters. ‘Literally, this could not happen at a worse time of the year,’ said StoneX analyst Josh Linville.”

“Seth Meyer, former U.S. Department of Agriculture chief economist and now at the Food and Agricultural Policy Research Institute, said farmers might alter crop choices and fertilizer applications due to the price spike,” Thukral and White reported. “Farmers need fertilizers for virtually all their crops if they want a good yield, but each crop and the soil they are grown in have different demands. Farmers could cut back on corn, which requires high rates of nitrogen fertilizer, or else sharply reduce fertilizer application rates, Meyer said.” READ MORE

Excerpt from E&E News Climatewire: But analysts say the disruption is already baked into oil and gas prices, threatening to prolong higher gasoline prices further into the midterm elections.

Here are five reasons high oil prices might persist:

It’s physical

The war on Iran has already disrupted the Gulf region’s energy markets so significantly that a quick recovery is no longer possible, said Anas Alhajji, a global energy markets expert. A mounting backlog of tankers on both sides of the Strait of Hormuz, which has been effectively shut down for more than a week, will take at least two weeks to clear. Then there will need to be a return to oil and gas production in a growing number of Middle Eastern countries that have now been shut down, including Qatar, Bahrain, Iraq and Saudi Arabia. Some of the damage from Iranian attacks, such as those on Qatar’s natural gas facilities, cannot be easily repaired, he said.

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It takes two to tango

Trump may have started the war — but he doesn’t have the power to unilaterally end it.

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It could get worse

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The longer the strait is effectively closed, the greater the chance the world tips toward a “deep recession,” said Greg Priddy, an expert on energy market disruption who worked at the U.S. Energy Information Administration in the George W. Bush administration. He said it would take more than a month to get back to normal if the war were to stop today, but that there will not be “normal tanker traffic as long as Iran has weapons to throw at tankers.”

Priddy, who is now a senior fellow at the conservative Center for the National Interest, said keeping the current volume off the market for another seven weeks would cause a major global economic contraction so severe that it would create “probably the worst recession that anyone has seen since the 1930s.”

It’s not just mines

The attacks on energy infrastructure from Iran and potentially other groups are widening by the day and have the potential to create lasting damage.

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It’s not just Iran

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That has created a wider network of groups that are willing to attack oil interests in the region, he (Anas Alhajji, a global energy markets expert) said, and there is evidence that they may already be preparing attacks. Cheap drones could be used to damage multimillion-dollar oil tankers.

“They are angry because their leader got killed,” Alhajji said. “The technology in the last 15 years has advanced to the extent that to cause multimillion-dollar damage with $500 is very possible.” READ MORE

Excerpt from Pattaya Mail: Energy Minister Auttapol Rerkpiboon has outlined government measures to stabilize fuel prices and reduce reliance on crude oil imports amid ongoing pressure on global energy markets. The government is using the Oil Fuel Fund to help manage diesel prices in cooperation with fuel traders while allowing limited adjustments in line with market conditions.

Authorities are also encouraging greater use of biofuels to reduce dependence on imported petroleum. Price incentives have been introduced to encourage motorists to switch to E20 gasoline, with stronger support provided for E20 than for E10. As a result, the price difference between the two fuels has widened, encouraging drivers to choose E20, which contains a higher share of domestically produced biofuel.

The Ministry of Energy has also adjusted diesel specifications from B5 to B7, increasing the biodiesel content from 5 percent to 7 percent to expand the use of palm-oil-based fuel in the country’s energy supply. In addition, the government is promoting energy-saving practices such as setting air-conditioning temperatures at 26 to 27 degrees Celsius, reducing electricity use in offices, encouraging remote work and online meetings, and maintaining vehicles to improve fuel efficiency.

Officials stated that Thailand is not experiencing a fuel shortage, although recent panic buying has temporarily increased demand at some service stations. Authorities urged the public not to stockpile fuel, warning that excessive purchases can create distribution pressure and safety risks. The government is also working to secure additional supply sources, expand oil reserves, and review fuel import standards in order to strengthen national energy security. (NNT) READ MORE

Excerpt from Bangkok Post: Over the medium to long term, he said the government should diversify energy import sources to reduce risk, while also accelerating the development of alternative energy and promoting wider public adoption.

Alternative energy accounts for less than 20% of Thailand's total energy usage, compared with around 50% or more in advanced economies.

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ADOPTING BIOFUELS

Energy officials are working on a plan to lift biofuel consumption as Thailand seeks to reduce its reliance on imported oil, with supply disruptions marring the industry.

The Department of Energy Business (DOEB) said the plan could include making biofuel use mandatory, a move considered urgent if the war continues through the Songkran festival in mid-April.

Sarawut Kaewtathip, director-general of the DOEB, said officials are considering whether to require greater use of ethanol -- a biofuel produced from sugar cane and cassava -- or rely solely on pricing mechanisms to encourage motorists to switch to gasohol blends with higher ethanol content.

The Thai Sugar Millers Corporation promoted use of gasohol E20, which contains 20% ethanol, as the country's primary fuel, which could cut crude oil imports by 2.9 million litres per day, or nearly 1.06 billion litres annually. Energy officials aim to encourage wider use of E20 by keeping its price lower than gasohol 91 and 95, which contain only 10% ethanol.

Officials are also examining hiking the proportion of palm oil-derived methyl ester in diesel fuel to expand biodiesel use, but the move would affect palm oil producers, methyl ester manufacturers and diesel vehicle owners.

An Energy Ministry source who requested anonymity noted diesel engines are designed for a 10% methyl ester blend, and higher proportions could risk engine damage.

The DOEB recently announced a temporary increase in the methyl ester blending ratio in diesel fuel from 5% to 7% by volume for three months, from March 14 to June 13, 2026. The measure follows a resolution by the Energy Policy and Planning Administration on March 9 meant to mitigate fuel price volatility and reduce oil imports amid global market instability. READ MORE