US Heating Oil Futures Hit Record High

US heating oil futures surged over 6% to record levels near $4.5 per gallon, as strikes on key Middle Eastern energy sites stoked fears of deeper supply disruptions. Iran targeted a major LNG facility in Qatar, part of a broader campaign against energy infrastructure in retaliation for attacks on its massive South Pars gas field. Meanwhile, the latest inventory report revealed that distillate stocks dropped sharply by 2.5 million barrels last week, surpassing expectations and highlighting ongoing supply pressures. These strains are further intensified by the effective shutdown of the Strait of Hormuz and export restrictions imposed by major Chinese and South Korean refiners. To ease supply bottlenecks, the US is temporarily waiving the Jones Act for 60 days and tapping 172 million barrels from strategic reserves as part of a coordinated global effort.

US heating oil futures surged past $4.26 per gallon to reach their highest level since June 2022 as unprecedented strikes on Iranian upstream energy infrastructure and a sharp drawdown in distillate inventories intensified global supply anxieties. This record rally follows reports that US and Israeli airstrikes hit the South Pars gas field to mark the first known direct engagement with critical production assets in the current conflict. While US crude inventories rose by 6.16 million barrels to 449.3 million in the week ending March 13th, distillate stocks fell by a steeper than expected 2.5 million barrels. This supply crunch is magnified by the effective closure of the Strait of Hormuz and protectionist export caps from major refiners in China and South Korea. Although Iraq plans a partial resumption of exports via Turkey, the market remains focused on retaliatory threats from Tehran following the killing of security chief Ali Larijani.

US heating oil futures rose to $4 per gallon, the highest level since June 2022, as the war in Iran continues to disrupt global energy supplies, with prices up more than 50% since late February. The surge is driven by the near closure of the Strait of Hormuz, a key route for about 20% of global oil flows, prompting countries to adopt protectionist measures to keep fuel domestically. Diesel prices have risen sharply, alongside jet fuel above $200 per barrel and fuel oil nearing $140, increasing costs across transport, agriculture and construction. Strong reliance on Persian Gulf refining has amplified the move. China has begun canceling fuel exports while South Korea plans to cap shipments, adding to supply pressures. Meanwhile, rising heating demand amid cooler forecasts in parts of the US is also supporting prices, raising concerns about broader economic impacts and political pressure on the Trump administration.