Heating Oil Market Tightens as US Inventories Hit Record Low

2026-08-28 15:31 By Agna Gabriel 1 min. read

US heating oil prices remained around $4.25–$4.50 a gallon, more than 80% higher than a year ago, as supplies fell to their lowest seasonal level on record.

US distillate inventories, which include diesel and heating oil, fell to 103.4 million barrels in the week ending August 21, the lowest level recorded for this time of year since comparable data began in the early 1980s.

The situation is particularly concerning as demand typically rises in the autumn, driven by winter heating, Northern Hemisphere harvests and Southern Hemisphere planting.

The Iran war has disrupted refined-fuel flows through the Strait of Hormuz, while Russia’s suspension of diesel exports and ongoing Ukrainian attacks on refineries are further tightening global availability.

US refiners are benefiting from exceptionally strong demand, with diesel refining margins reaching record levels and exports rising sharply.

However, increased US shipments remain insufficient to offset the global supply shortfall.



News Stream
Heating Oil Market Tightens as US Inventories Hit Record Low
US heating oil prices remained around $4.25–$4.50 a gallon, more than 80% higher than a year ago, as supplies fell to their lowest seasonal level on record. US distillate inventories, which include diesel and heating oil, fell to 103.4 million barrels in the week ending August 21, the lowest level recorded for this time of year since comparable data began in the early 1980s. The situation is particularly concerning as demand typically rises in the autumn, driven by winter heating, Northern Hemisphere harvests and Southern Hemisphere planting. The Iran war has disrupted refined-fuel flows through the Strait of Hormuz, while Russia’s suspension of diesel exports and ongoing Ukrainian attacks on refineries are further tightening global availability. US refiners are benefiting from exceptionally strong demand, with diesel refining margins reaching record levels and exports rising sharply. However, increased US shipments remain insufficient to offset the global supply shortfall.
2026-08-28
Heating Oil Extends Gains
US heating oil futures rose to around $4.30 per gallon, extending gains from the previous session as supply concerns intensified amid rising geopolitical risks. US-Iran diplomatic efforts remained stalled after Washington ruled out reviving the terms of a June agreement and said it was not currently negotiating with Tehran. The US has instead intensified pressure through new sanctions earlier this week, which Iran condemned as hostile and ineffective. Meanwhile, Black Sea shipments faced heightened risks as Russia considers intensifying military pressure on Ukraine after determining that peace negotiations have reached a dead end. At the same time, strikes on Russian refineries have disrupted refining capacity, adding to regional fuel supply concerns. In the US, EIA data showed distillate stockpiles fell by a larger-than-expected 2.2 million barrels last week, compared to expectations for a 1.6 million-barrel decline, pointing to tight inventories.
2026-08-28
Heating Oil Resumes Decline
US heating oil futures resumed their decline to around $4.20 per gallon on Thursday, after gaining in the previous session, as markets weighed mixed geopolitical developments. Iran and Oman agreed on how to divide their respective shares of the Strait of Hormuz’s waters and related revenues, though Tehran said an agreement with Oman alone would not be enough to reopen the key waterway. Crude also appeared to be moving out of the Persian Gulf. Limiting losses, Russia is reportedly preparing to intensify its attacks on Ukraine after determining that peace negotiations have reached a dead end. The developments raised concerns over prolonged Russian refined-product export restrictions as Ukrainian strikes pushed refinery runs toward multiyear lows. Meanwhile, EIA data showed US distillate stockpiles fell by a larger-than-expected 2.2 million barrels last week, versus expectations for a 1.6 million-barrel decline, pointing to tight inventories.
2026-08-27