Heating Oil Trades at 2-Month High

US heating oil prices rose to around $4.10 per gallon, the highest level in two months, as concerns over deeper supply disruptions intensified. The US continued strikes on Iranian military targets for an 11th consecutive night, while Yemen’s Iran-aligned Houthis threatened attacks on Saudi oil vessels in the Bab el-Mandeb Strait and announced a naval blockade of Saudi Arabia. President Donald Trump also downplayed the chances of imminent negotiations with Iran and threatened expanded strikes. Beyond the Middle East, supply risks extended to the Black Sea, where attacks targeted the Caspian Pipeline Consortium terminal, a key outlet for Kazakhstan’s crude exports. Markets also faced tighter refined fuel supplies from continued Ukrainian attacks on Russian refineries following Moscow’s diesel export ban, while seasonal refinery maintenance and years of refinery closures in the US and Europe added further pressure.

US heating oil traded around $4.10 per gallon, remaining near a two-month high as investors balanced geopolitical risks against signs of renewed diplomacy in the Middle East. Iran's Foreign Ministry said it had received proposals from international mediators aimed at easing tensions with the US, helping trim earlier gains. Even so, markets remained focused on the risk of supply disruptions after fresh military exchanges between Washington and Tehran, including attacks on vessels transiting the Strait of Hormuz and a strike on an oil facility in Kuwait over the weekend. Supply concerns were also supported by continued Ukrainian attacks on Russian refineries following Moscow's diesel export ban. Seasonal refinery maintenance and years of refinery closures in the US and Europe have further tightened fuel markets.

Heating oil futures in the US climbed toward $4.20 per gallon, reaching their highest level since early April, as intensifying strikes in the Middle East fueled fears of disruptions to global refined fuel supplies. Iran said the ceasefire with the US had effectively collapsed as both sides expanded attacks beyond military sites to critical infrastructure, signaling little prospect of a return to the fragile truce. Adding to supply concerns, Ukraine continued its attacks on Russian oil refineries after Russia imposed a diesel export ban earlier this month. Seasonal refinery maintenance and years of refinery closures across the US and Europe further constrained fuel supplies. The tighter supply backdrop pushed US refining margins to record highs. Despite a 4.6 million-barrel increase in distillate fuel inventories in the week ending July 10, EIA data showed stockpiles remained well below their five-year seasonal average.