Heating Oil Rises 3%

US heating oil futures rose about 3% to above $3.65 per gallon on Monday, recouping losses from recent sessions as escalating hostilities between the US and Iran heightened concerns over fuel supplies. The US launched another wave of strikes on Iran on Sunday after hitting 140 targets a day earlier in response to an IRGC attack on a container ship in the Strait of Hormuz. Iran retaliated by targeting US military facilities across Jordan, Kuwait, Bahrain, and Oman. While Tehran claimed it had closed the Strait of Hormuz until further notice, US Central Command maintained that the strategic waterway remained open to lawful shipping. The latest flare-up further dimmed hopes for diplomacy after reports last week indicated technical talks were underway. Meanwhile, Russia said it would suspend diesel exports and become a net importer as repeated Ukrainian attacks and higher crude prices disrupted operations at key refineries, adding to supply concerns.

US heating oil futures fell to around $3.50 per gallon after recently surging more than 10% to the highest level in over a month, as traders judged the latest US strikes on Iran were unlikely to trigger a broader conflict. While security conditions in the Strait of Hormuz have worsened and tanker traffic has slowed, markets are not pricing in a full closure of the vital shipping route. Investors instead expect energy flows through the Persian Gulf to continue, as technical talks between the US and Iran continue and Washington remains committed to finding a solution. Elsewhere, Russia, a major diesel producer, announced it would suspend exports and become a net importer after higher crude prices and repeated Ukrainian attacks disrupted operations at key refineries. Heating oil prices remain well above pre-conflict levels despite retreating from the record high reached in late March, reflecting persistent concerns over global fuel supplies and refinery output.

Heating oil futures in the US climbed above $3.70 per gallon, the highest in over one month, amid mounting threats to supply. Iran and the US exchanged a wave of attacks after the IRGC struck a tanker crossing the Strait of Hormuz, prompting President Trump to negate the validity of the current ceasefire after multiple tankers turned back from crossing the chokepoint. The increase in crude oil prices was exacerbated by soaring crack spreads in distillate fuel as tight refining capacity drove energy companies to hike sales prices. On top of that, major diesel producer Russia announced it would halt exports and shift to an importer, as higher crude prices exacerbated the series of Ukrainian strikes on the country's largest refineries. Heating oil prices had dropped sharply since peaking at a record high of $4.7 after in late March, but recently rebounded to trade over 40% above levels from before the conflict.