• The closure of the Strait of Hormuz has increased SAF price volatility in 2026. Prices in Europe have surged to an average of $2,830 per ton, or $8.58 per gallon, so far in the second quarter of 2026 – up 31% from the 2026 average. This is roughly double the price of jet fuel in Northwest Europe, which has averaged $1,404 per ton since the Iran war began.
• Some EU member states have removed double counting for advanced biofuels in transposing the Renewable Energy Directive III (RED III), increasing demand for hydrotreated vegetable oil (HVO). Higher HVO margins are set to encourage European producers to expand HVO output and import SAF from the US and Asia Pacific.
• Similarly, higher demand for biomass-based diesel following the finalized blending mandates has lifted US feedstock prices. US SAF production costs are rising, reaching $1,000 per ton above production costs in Asia Pacific and Europe in May 2026.
• China became Asia’s largest renewable fuel producer in 2025. Weak SAF prices in the first quarter of 2026 weighed on Chinese exports, but shipments rebounded in April with higher prices.
• Most SAF is sold through bilateral offtake agreements, limiting public price data and making the market difficult to forecast. To improve transparency, BNEF combines trade-based price data, breakeven costs and market fundamentals to model SAF forward curves for Northwest Europe, the US Gulf Coast and Singapore.

BNEF clients can read the full report here.