OILS NEWS SPECIAL EDITION  |  2ND MARCH 2026  |  STRAIT OF HORMUZ CRISIS ⚠  MARKET ALERT: HIGH IMPACT EVENT IN PROGRESS

GLOBAL OILS INTELLIGENCE

Philippine Coconut & Food Oils Market Briefing

US-Israeli strikes on Iran (28 February 2026) have effectively halted commercial shipping in the Strait of Hormuz. Oil tankers are anchored. Insurance costs have made passage commercially unviable. Brent crude has surged over 10%. This briefing assesses the cascading impact on global food oils — and specifically Philippine coconut oil.

THE SITUATION: HORMUZ IN CRISIS

In the early hours of 28 February 2026, the United States and Israel launched coordinated military strikes on Iranian military infrastructure. Iran’s Supreme Leader Ali Khamenei was reported killed. Tehran responded with retaliatory strikes targeting US military assets across the region — Qatar, Kuwait, the UAE and Bahrain — triggering the most significant disruption to Middle East shipping since the Iran-Iraq War of the 1980s.

Iran’s Islamic Revolutionary Guard Corps (IRGC) broadcast warnings to vessels on VHF radio: ‘No ship is allowed to pass the Strait of Hormuz.’ At least three civilian vessels have been struck. Satellite imagery confirms over 150 tankers have dropped anchor across the Persian Gulf. No formal notice of closure has been issued, but the de facto halt is already reshaping global commodity markets.

KEY FACT:  The Strait of Hormuz carries approximately 20% of the world’s daily oil supply — around 20 million barrels — and one-third of globally traded nitrogen fertiliser. There is no practical alternative route for the majority of this volume.

IMPACT ON GLOBAL FOOD OILS

Palm Oil — The Immediate Pressure Point

Palm oil is the world’s most traded vegetable oil and a key benchmark for the entire edible oils complex. While Malaysia and Indonesia produce the vast majority of global supply, the shipping cost shock from Hormuz disruption flows rapidly into palm oil pricing via two channels: fuel costs for vessels and displacement of competing Middle Eastern sunflower and soybean oil supplies.

• Insurance war-risk premiums are now making passage through the Gulf commercially prohibitive for many operators.
• Rerouting via the Cape of Good Hope adds 15–20 days to European and US transit times, compressing supply windows.
• Any prolonged outage of the Strait would strand significant volumes of palm oil-linked feedstock currently en route to Asian refiners.

Sunflower & Soybean Oil — Supply Rerouting Pressure

Middle Eastern nations are significant importers of sunflower and soybean oils. With regional instability spiking and logistics disrupted, buyers in Europe and Asia are likely to scramble for alternative vegetable oil supply — placing upward pressure across the entire edible oils complex, including rapeseed and coconut oil.

Fertiliser — The Hidden Food Oils Threat

Often overlooked in coverage of Hormuz disruptions: over 15 million metric tonnes of nitrogen fertiliser annually transit the Strait, sourced from Qatar, Saudi Arabia, Iran, Oman and the UAE. Fertiliser supply disruptions feed into oilseed crop costs months later — meaning a sustained blockade could raise the structural cost of producing soybean and rapeseed oils well into Q3 and Q4 2026.

PHILIPPINE COCONUT OIL: THREAT AND OPPORTUNITY

The Philippines is the world’s largest exporter of coconut oil, accounting for approximately 60–65% of global traded volumes. Unlike Middle Eastern or palm oil supply chains, Philippine coconut oil transits the Pacific and Indian Oceans — routes that are not directly disrupted by Hormuz closure. This gives Philippine coconut oil a structural advantage in the weeks ahead.

Upside Factors for Philippine Coconut Oil

• Price substitution effect: As palm oil and other vegetable oils spike due to shipping disruption, coconut oil becomes competitively attractive to industrial and food-grade buyers in Europe and the Americas.
• Route advantage: Coconut oil shipped from Mindanao and Quezon province to Rotterdam, Hamburg or US Gulf ports is entirely unaffected by Hormuz restrictions.
• Middle East demand signal: The Gulf region is a significant buyer of food-grade coconut oil for confectionery and bakery applications. Paradoxically, once stability returns, pent-up demand could accelerate purchases.
• Premium positioning: Organic and virgin coconut oil from Davao and Quezon face minimal supply disruption and could command premium pricing in European markets anxious about supply security.

Risk Factors for Philippine Coconut Exporters

• Input cost exposure: The Philippines sources 100% of its crude oil from the Middle East. Domestic fuel price increases directly raise farm-gate production, transport and milling costs for coconut processors.
• Currency risk: Philippine peso vulnerability to oil-price inflation and potential trade deficit widening could compress peso-denominated margins for exporters.
• Shipping insurance surcharges: Even on unaffected Pacific routes, war-risk premium increases are being applied across global marine insurance pools, adding cost to all containerised export movements.
• Indian Ocean risk overspill: Should Iran direct asymmetric operations toward the Arabian Sea or Indian Ocean, Philippine export routes via Malacca Strait and Indian Ocean could be indirectly affected.

STRATEGIC OPPORTUNITY:  Buyers in Europe and North America who are currently dependent on Middle Eastern or South Asian vegetable oil supply chains should be approached immediately. Philippine coconut oil has availability, route security, and quality credentials to fill the gap.

PRICE OUTLOOK: NEXT 4–6 WEEKS

Scenario Analysis

SCENARIO A — SHORT DISRUPTION (1–2 weeks)

Shipping resumes with elevated insurance premiums. Brent stabilises at $80–90/bbl. Palm oil +8–12%. Coconut oil prices firm by $50–80/tonne CFR Rotterdam as substitution buying emerges. Modest but meaningful upside for Philippine exporters.

SCENARIO B — SUSTAINED DISRUPTION (4–8 weeks)

Brent approaches $100/bbl. The edible oil complex broadly rallies by 15–25%. Coconut oil could test 2022 highs. Philippine processors face significant input cost pressure but export revenues climb. Peso is likely under sustained pressure. Net effect: positive for USD-priced contracts, challenging for domestic margins.

SCENARIO C — FULL BLOCKADE + INFRASTRUCTURE STRIKES

Brent exceeds $100/bbl, potentially testing $120+. Global recession risk rises sharply. Edible oil demand destruction could offset supply-side price gains. Coconut oil would likely face a volatile, two-phase market: initial spike followed by demand contraction. This scenario, while extreme, cannot be ruled out in the current environment.

WHAT BUYERS SHOULD DO NOW

For International Buyers of Coconut Oil

• Assess your Middle East sourcing exposure: Any oils currently routed through or priced against Gulf supply chains carry elevated risk..
• Secure Philippine supply now: Philippine sellers have available inventory and route security. Spot and 60-day forward volumes are still available at pre-crisis pricing.
• Build buffer stocks: Insurance against prolonged disruption justifies carrying 30–45 days of additional coconut oil stock.

Global Oils Intelligence  |  TM Duché & Sons Ltd  |  March 2026  |  This briefing is prepared for informational purposes only and does not constitute financial or trading advice.