US heating oil prices climbed toward $3.70 per gallon, extending the previous session’s gains amid mounting fears that the war involving Iran could drag on and further disrupt energy supplies. The escalation in hostilities has intensified concerns about the security of key shipping routes and global distillate flows.
US forces conducted strikes on multiple targets in Iran, and reports indicated that President Donald Trump warned of additional attacks unless an interim peace agreement is reached. In response, Iran was reported to have launched missile and drone strikes on US vessels operating in the Strait of Hormuz.
These developments have heightened worries about a prolonged military confrontation and undermined confidence in the prospect of a durable peace deal. A sustained conflict could keep the vital waterway effectively closed and continue to block exports of distillate products from the region.
On the supply side, government data showed that US distillate inventories, which include diesel and heating oil, rose by 0.2 million barrels in the first week of June. Markets had expected a draw of 0.5 million barrels, so the surprise build partially offset the bullish impact of geopolitical risks on prices.
