Heating Oil Tumbles 17%

US heating oil prices traded around $3.20 per gallon, hovering close to their lowest level since March 11, as the US-Iran deal is expected to reopen the Strait of Hormuz and facilitate a return of Middle Eastern energy exports. Under the interim pact, which is scheduled to be signed later this week, Tehran would receive broad financial incentives, including the immediate right to sell its oil. Still, markets are assessing the durability of the agreement and the timeline for shipping through the Strait to normalize, as many operators may wait several weeks before resuming tanker transits. Producers have also cautioned that a full recovery could take months, citing technical and geological constraints as well as infrastructure damage. Meanwhile, industry data showed that distillate stockpiles, including diesel and heating oil, fell by 461,000 barrels in mid-June after rising by 1.3 million barrels in the previous week.

US heating oil prices dropped to about $3.20 per gallon, the lowest level since early March, after the US and Iran reached a deal to end the war, paving the way for a gradual resumption of energy exports from the Middle East. President Donald Trump said the deal was “now complete,” adding that the Strait of Hormuz would reopen without transit fees and sanctions-related restrictions on Iran would be lifted once the agreement is signed on June 19. Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed the agreement, though he said the text would remain confidential until the official signing ceremony. While this eases concerns for Gulf producers, the path to restoring flows still has hurdles, including mine clearance and how strictly Iran will regulate maritime passage. Producers cautioned that a complete recovery could take months, citing technical and geological constraints and infrastructure damage.

US heating oil prices fell to around $3.30 per gallon, hitting a seven-week low, weighed by expectations that the US and Iran are moving closer to a peace agreement that could bring an end to the conflict. Iran’s semi-official Mehr News Agency reported that a 14-point draft deal between the two countries includes provisions to lift oil sanctions, although it still requires approval from Iranian authorities. Separately, US President Donald Trump said a peace agreement could be signed as soon as the weekend. The developments eased earlier tensions and raised hopes that the Strait of Hormuz, which accounts for about one-fifth of global oil flows, would gradually reopen. Meanwhile, EIA data showed distillate stocks, including diesel and heating oil, rose by 0.2 million barrels in the first week of June, compared with expectations for a 0.5 million barrel draw.