US heating oil futures jumped more than 13% to $3.75 per gallon on Wednesday, the highest level in over a month, amid escalating supply risks. Tensions intensified after Iran’s Revolutionary Guard Corps attacked a tanker transiting the Strait of Hormuz, triggering a series of retaliatory strikes between Iran and the United States. In response, President Trump declared the existing ceasefire void, following reports that multiple tankers turned back from the key shipping chokepoint.
The rally in crude oil prices was amplified by widening crack spreads for distillate fuels, as constrained refining capacity forced energy companies to raise wholesale prices. Adding to the pressure, major diesel supplier Russia announced it would suspend exports and become a net importer, with higher crude costs compounding the impact of repeated Ukrainian attacks on its largest refineries.
Heating oil prices had fallen sharply after hitting a record high of $4.70 per gallon in late March, but have since rebounded and are now trading more than 40% above pre-conflict levels.
