Heating Oil Climbs Further

Heating oil futures rose toward $4.10 per gallon, their highest level since June 2022, amid concerns over prolonged supply disruptions as the war in the Middle East entered its third week. The Trump administration indicated that the conflict with Iran could continue for several more weeks, and President Trump called on allied countries to deploy ships to help ships pass through the Strait of Hormuz, though no deal has been set yet. The conflict has put oil infrastructure at risk, causing the biggest oil disruption in history. On Friday, the US carried out strikes on military sites on Kharg Island, a vital Iranian oil export hub responsible for handling around 90% of the country’s crude exports, and warned that the island could be targeted if Tehran interferes with transit through the strait. Meanwhile, the IEA announced that oil from emergency stocks will flow to Asia and Oceania immediately.

Heating oil futures held above $3.90 per gallon, remaining near their highest level since June 2022, as markets braced for further turmoil in the Middle East. President Donald Trump warned Iran of additional strikes after Supreme Leader Mojtaba Khamenei said the Strait of Hormuz would stay closed and could open other fronts if US and Israeli attacks persist. Meanwhile, the US moved to ease supply concerns by issuing a 30-day license allowing countries to purchase Russian oil and petroleum products stranded at sea. Treasury Secretary Scott Bessent also urged forming an international coalition to escort tankers through the Strait “as soon as militarily feasible.” This follows coordinated IEA releases of unprecedented reserves, which have done little to slow the energy rally. Gasoline is on track for a second consecutive weekly gain.

Heating oil futures surged over 7% past $3.96 per gallon, marking the highest since June 2022 as risks that refined product supply from the Persian Gulf will remain halted for longer intensified. The new Iranian Supreme Leader Mojtaba Khamenei stated that the Strait of Hormuz should stay closed in his first public statement which extended bets on the duration of supply disruptions after multiple tankers were hit by projectiles overnight. This defiant rhetoric coincided with strikes of increasing intensity between Iran and regional adversaries. Tankers have been unable to take deliveries since the start of the conflict which effectively removed 20% of global trade and forced producers to cut output as storage capacity was reached. The International Energy Agency stated that the disruption was the largest in history and triggered a record 400 million barrel release of strategic stockpiles. Still traders remain skeptical that these volumes can bridge the massive daily supply gap.