US heating oil futures climbed above $4.26 per gallon, reaching their highest level since June 2022, as unprecedented strikes on Iranian upstream energy infrastructure and a sharp drawdown in distillate inventories heightened global supply concerns. The surge follows reports that US and Israeli airstrikes targeted the South Pars gas field, marking the first known direct attack on critical production assets in the current conflict.
While US crude inventories increased by 6.16 million barrels to 449.3 million in the week ending March 13th, distillate stocks declined by a steeper-than-expected 2.5 million barrels. The resulting supply squeeze is being compounded by the effective closure of the Strait of Hormuz and protectionist export restrictions imposed by major refiners in China and South Korea. Although Iraq intends to resume exports partially via Turkey, traders remain focused on the prospect of Iranian retaliation following the killing of security chief Ali Larijani.
