Heating Oil Prices Hold Steady

US heating oil prices held steady around $3.54 per gallon after falling in the prior session, as tensions between the US and Iran have flared again. US Central Command said that it conducted "self-defense strikes" in Tehran at President Donald Trump's direction in response to the downing of a US helicopter that was patrolling over the Strait of Hormuz. The fresh strikes risk undermining an already fragile ceasefire in the region and raised doubts over efforts to secure a more lasting peace agreement that could reopen the strait. The critical waterway remained largely closed under a dual blockade from both sides, sharply limiting exports of distillate products from the region. On the supply side, US distillate inventories, including diesel and heating oil, rose by 1.502 million barrels in the final week of May.

US heating oil futures fell below $3.60 per gallon, after erasing gains in the previous session, as Israel and Iran agreed to halt mutual attacks following a recent escalation in violence. Israeli Prime Minister Benjamin Netanyahu said Israel is pausing strikes on Iran for now but will retaliate if Tehran attacks again, while Iranian media echoed a similar stance. The development kept hopes alive for efforts to renew the ceasefire into a broader agreement in the Middle East. While a fragile truce remains in effect, the Strait of Hormuz remains constrained under a two-sided blockade by Tehran and Washington, significantly limiting exports of distillate products from the region. Meanwhile, US distillate inventories, including diesel and heating oil, rose by 1.502 million barrels in the final week of May.

US heating oil futures climbed above $3.70 per gallon, recovering from a two-day decline after reports showed that Iran and Israel exchanged fire, putting US efforts to secure a new interim ceasefire with Tehran at risk. Iran launched a fresh wave of attacks on Israel hours after firing ballistic missiles over the weekend. Israel retaliated with strikes on military targets in western and central Iran, while explosions were reported in Tehran. This comes even as President Donald Trump urged both sides to stop fighting and give diplomacy a chance. The latest developments raise the risk of further military escalation, which could deepen disruptions to Middle Eastern shipping routes and energy exports, intensifying tightness in global distillate markets. Meanwhile, US distillate inventories, including diesel and heating oil, increased by 1.502 million barrels in the final week of May.