US heating oil prices jumped more than 7% to about $4.19 per gallon after Iran-backed Houthi militants claimed responsibility for an attack on Saudi Arabia’s Jazan refinery on the Red Sea. Saudi authorities reported that the resulting fire was extinguished early Sunday, but offered no additional details.
The incident further strained an already tight global diesel market. Disruptions to shipping through the Strait of Hormuz have intensified the effects of Russia’s fuel export restrictions, while refinery capacity remains under pressure as fuel demand continues to outstrip supply. US refiners are processing crude at the highest seasonal rates since 2018, even though national refining capacity has declined by nearly 600,000 barrels per day over that period.
At the same time, Iran and Oman have yet to finalize an agreement to reopen the Strait of Hormuz. Iran has said the deal is “very close,” but maintains that the US must lift its blockade and provide compensation before the waterway can be reopened.
