Heating Oil Holds Losses

US heating oil futures traded below $3.9 per gallon in early August, holding recent losses as markets assessed developments surrounding the Strait of Hormuz. President Donald Trump said his latest offer of talks was Tehran's "last chance" and expressed confidence that the key waterway would fully reopen. Although Iran denied holding direct talks with the US, it said discussions with Oman to increase shipping through the strait were making progress. Meanwhile, Gulf producers continued to pursue alternative export routes, with Turkey and Iraq extending a pipeline agreement, while Kazakhstan restarted its crude shipments through the Caspian Pipeline Consortium following a temporary disruption. Separately, Russian diesel supplies remained constrained by ongoing Ukrainian attacks on major oil refineries, prompting Moscow to extend its diesel and gasoline export ban through January 2027.

US heating oil futures fell toward $4.0 per gallon in early August, extending losses for a third straight session, as President Donald Trump canceled a planned attack on Iran. Trump said Saudi Arabia and other key Middle Eastern allies had urged him to halt the planned strikes and resume negotiations, while continuing to press for the swift reopening of the Strait of Hormuz. The development provided some relief after days of escalating tensions, easing concerns over supply disruptions. Meanwhile, Gulf producers continued to pursue alternative export routes, with Turkey and Iraq extending a pipeline agreement, while Iran said talks with Oman on a new route through the strait were in their final stages. Separately, Russian diesel supplies remained constrained by ongoing Ukrainian attacks on major oil refineries, prompting Moscow to extend its diesel and gasoline export ban through January 2027.

Heating oil futures in the US fell below $4.10 per gallon in late July, pulling back from a nearly four-month high, as investors weighed improving shipping activity against ongoing geopolitical risks. Middle East oil shipments appeared to have picked up in recent days, with more vessels leaving the Persian Gulf undetected and two Saudi tankers successfully transiting the Bab el-Mandeb Strait. Separately, Saudi Arabia proposed an international maritime coalition to protect key shipping routes, with representatives from 43 countries participating in talks to safeguard navigation in the Red Sea following the Iran-backed Houthis' announced blockade against the kingdom. Meanwhile, Russian diesel supplies remained constrained by recent Ukrainian attacks on refineries, prompting Moscow to halt exports for all of July. Still, heating oil remained on track for a roughly 27% monthly gain as geopolitical tensions escalated earlier this month amid exchanges of strikes between the US and Iran.