US heating oil prices hovered around $3.20 per gallon, near their lowest level since March 11, as the anticipated US-Iran agreement is expected to reopen the Strait of Hormuz and enable the resumption of Middle Eastern energy exports. Under the interim deal, which is slated to be signed later this week, Tehran would gain substantial financial incentives, including the immediate ability to sell its oil.
However, markets are still evaluating the durability of the agreement and the pace at which shipping through the Strait will return to normal, with many operators likely to wait several weeks before restarting tanker traffic. Producers have also warned that a full recovery could take months, citing technical and geological limitations as well as infrastructure damage.
At the same time, industry data showed that distillate inventories — including diesel and heating oil — declined by 461,000 barrels in mid-June, following a 1.3 million-barrel build the week before.
