Palm oil prices climbed past 4,000 ringgit, tracking gains in soyoil after the United States proposed a record 24.02 billion-gallon biofuel blending mandate for 2026—nearly eight per cent above 2025 levels.

The U.S. Environmental Protection Agency on Friday unveiled a long-anticipated plan to increase domestic biofuel production and reduce reliance on imports, according to Bloomberg.

The proposal would mandate refiners to blend a record 24.02 billion gallons of biofuels into gasoline and diesel in 2026—almost eight per cent higher than the 2025 target and exceeding analysts’ expectations.

“The proposal supports demand for edible oils and crude palm oil prices, as the higher biodiesel mandate is expected to sustain U.S. consumption of edible oils,” analysts Ivy Ng Lee Fang and Lim Yue Jia of CIMB Securities said in a note.

Chicago soyoil extended its rally on Monday after jumping over six per cent on Friday, marking its largest two-day gain in nearly three years.

In response, palm oil futures in Kuala Lumpur surged as much as 4.1 per cent

Rising crude oil prices, fueled by escalating conflict in the Middle East, are also boosting palm oil.

Global benchmark Brent extended its rally on Monday after a seven per cent surge on Friday, as investors remain wary of potential attacks on energy infrastructure and shipping in a region that supplies about one-third of the world’s crude.