US heating oil prices declined toward $3.10 per gallon in June, their lowest level since early March, effectively erasing almost all of the risk premium added during the Iran conflict. The drop came amid expectations that energy exports from the Middle East will gradually return to normal.
According to reports, the US and Iran concluded an interim agreement remotely. Pakistan’s prime minister stated that the deal would trigger the immediate reopening of the Strait of Hormuz and the lifting of the US naval blockade on Iranian ports. He further noted that the agreement obliges both parties to permanently cease hostilities and establishes a 60-day window to negotiate a final settlement on Iran’s nuclear program.
President Trump, however, cautioned that military action could resume if Tehran fails to comply with the terms of the 14-point memorandum of understanding. In the wake of these developments, the IEA warned of a potential supply glut next year.
Meanwhile, government data showed that distillate inventories—which include diesel and heating oil—increased by 0.951 million barrels in mid-June.
