Heating Oil Moves Toward Record High

US heating oil futures climbed $4.50 per gallon, moving back toward its record level, as tensions in the Middle East intensified. The rally has put prices on course for a record monthly increase of more than 50%, driven by major disruptions to energy supply following the near shutdown of the Strait of Hormuz. In recent developments, Iran-aligned Houthi forces in Yemen have entered the conflict, stating they will continue operations until strikes on Iran and its affiliated groups cease. Their involvement raises fresh concerns for oil markets, with ongoing Red Sea disruptions and potential risks to shipments from Yanbu threatening to further squeeze supply. At the same time, the deployment of additional US troops to the region has heightened worries about a possible ground escalation. The conflict has now stretched into its fifth week, reducing hopes for a swift resolution.

US heating oil futures rose above $4.40 per gallon, remaining highly volatile as markets continued to monitor the ongoing Middle East crisis. Prices have fluctuated throughout the month and are up more than 45% so far, on track for their largest monthly gain on record, as the near-complete closure of the Strait of Hormuz has severely disrupted energy flows. In the latest development, markets digested Washington’s delayed action on Iran’s energy sector. President Donald Trump said Iran had requested seven days, but he granted 10, pushing the deadline to April 6. Analysts noted that while the extended ceasefire eases some near-term pressure, the geopolitical premium is unlikely to fade, as around 8 million barrels per day remain offline and Persian Gulf flows are still at risk. Meanwhile, EIA data showed distillate inventories, including diesel and heating oil, rose by 3.0 million barrels last week, far exceeding expectations of a 1.3 million-barrel draw.

US heating oil futures rose above $4 per gallon on Thursday, partially recovering losses from the previous session, as investors weighed conflicting signals from the US and Iran over a potential end to the conflict. Tehran stated it has no intention of engaging in direct talks with Washington, emphasizing that mediated discussions do not constitute formal negotiations. By contrast, the White House maintains that peace talks are ongoing, while cautioning that military action could be intensified if Iran does not acknowledge its losses. Meanwhile, distillate inventories, including diesel and heating oil, rose by 3.0 million barrels in the week ending March 20, far exceeding analysts’ expectations of a 1.3 million-barrel draw and sharply reversing the prior week’s decline. Energy markets have been volatile since the start of the war, with heating oil prices up more than 50% this month due to supply disruptions in the Strait of Hormuz.