Heating Oil Rises as Diesel Supply Tightens Ahead of Winter

Heating oil futures climbed above $4.70 per gallon, approaching the record $5.20 reached in mid-September, as tighter diesel supplies added pressure to fuel markets ahead of winter. Russia has extended its restrictions on most diesel exports through October, while also maintaining curbs on bunker fuel and gasoil shipments. The measures were introduced after Ukrainian attacks on Russian refineries reduced processing rates and have been repeatedly prolonged since July. Before the restrictions, Russia supplied about 10% of global seaborne diesel volumes, making the loss of those barrels particularly significant amid disruptions linked to the Strait of Hormuz. In the US, President Donald Trump is considering limiting diesel exports to contain domestic prices.

Heating oil futures rose above $4.5 per gallon, not far from the record high of $5.2 reached in mid-September, tracking volatile oil prices as traders continued to assess developments in the Middle East and the lack of progress in negotiations between the US and Iran aimed at ending the war. The conflict between Russia and Ukraine is also disrupting fuel trade routes, adding to pressure on the energy market. Meanwhile, US President Trump said he was still considering “very seriously” a ban on US diesel exports to curb high domestic fuel prices, despite other administration officials pursuing alternative measures. Energy Secretary Chris Wright said officials were working with refiners on voluntary export curbs, while the White House was also considering broader sales of tax-exempt, red-dyed diesel. On the data front, US distillate inventories were around 12% below the five-year average, leaving heating oil supplies relatively tight as the winter heating season approaches.

US heating oil futures extended their gains toward $4.80 per gallon, as weaker diplomatic hopes in the Middle East outweighed uncertainty over potential US diesel export restrictions. President Donald Trump rejected Iran’s conditional proposal to reopen the Strait of Hormuz, dimming prospects for a quick resumption of traffic through the key waterway, although he said he expects negotiations to resume. Separately, Trump said he is still considering “very seriously” a US ban on diesel exports to curb high domestic fuel prices, despite other administration officials pursuing alternatives. Energy Secretary Chris Wright said officials are working with refiners on voluntary export curbs, while the White House is also considering broader sales of tax-exempt red-dyed diesel. On data, US distillate inventories were around 12% below the five-year average, leaving heating-oil supplies relatively tight as the winter heating season approaches.