Heating Oil Holds Losses

US heating oil futures traded around $4.28 per gallon, holding most of their losses from the previous session, as markets assessed intensified US economic pressure on Iran aimed at reopening the Strait of Hormuz. The Trump administration announced plans to impose secondary sanctions on entities facilitating Iran’s economy as part of a new campaign dubbed “Operation Economic Outcast.” Treasury Secretary Scott Bessent said the US was targeting Iran’s financial connections globally and urging other countries to cease economic ties with Tehran. Still, markets remain uncertain whether the measures will ease Iran’s grip on the key waterway or instead prolong disruptions. Meanwhile, elevated diesel refining margins and low US distillate inventories highlighted persistent tightness in refined-product markets, with stocks around 12–13% below the five-year average ahead of the fall maintenance and winter heating season.

US heating oil futures fell to around $4.30 per gallon, retreating from their highest level since early April, tracking a decline in benchmark crude prices as markets await Washington’s announcement of new sanctions on Iran. Treasury Secretary Scott Bessent is set to outline the measures at a press conference, warning that the US could impose what he described as the “toughest sanctions in history.” President Donald Trump has also threatened penalties on countries that continue trading with Tehran. The US efforts to isolate Iran could increase the risk of retaliation and deeper disruptions to global energy markets. Meanwhile, tighter Canadian crude supplies could put upward pressure on refined product prices by constraining refinery feedstock, particularly in the US Midwest, where refiners rely on Canada for around 70% of their crude. Fuel supply concerns have also intensified after Ukrainian strikes on Russian refineries disrupted production and led to shortages in several regions.

US heating oil futures held above $4.45 per gallon, consolidating near their highest level since early April, on fading hopes of the reopening of the Strait of Hormuz. President Donald Trump unveiled a new package of measures, describing it as an unprecedented campaign targeting Iran’s economy. This came after Trump said no talks with Iran were taking place or planned, while asserting that the US naval blockade remained active and that the strait was open. Iran, however, countered that the waterway would remain closed until the US fulfilled its prior conditions. The lack of resolution heightened expectations of prolonged supply disruptions from the region. Tanker flows remained subdued, with limited vessels still passing through the strategic route as shipowners stayed cautious. Meanwhile, EIA data showed that distillate stockpiles, which include diesel and heating oil, fell by 1.53 million barrels in the week ended August 14.