US heating oil futures edged down to $3.23 per gallon, hovering near their highest levels since September 2023, as large domestic inventory builds partly offset geopolitical risk. EIA data showed an unexpected 0.4 million-barrel increase in distillate stocks for the week ended February 27th, compared with expectations for a 2.6 million-barrel draw. This surplus emerged even as tanker traffic through the Strait of Hormuz plunged by 70% following the launch of Operation “Epic Fury.”
The IRGC has asserted full control over the strategic chokepoint and has threatened to “set ablaze” any vessels attempting passage. However, immediate supply concerns have been moderated by President Trump’s directive for the DFC to extend political risk insurance to tankers operating in the region. In addition, US crude inventories jumped by 3.5 million barrels to 439.3 million, far surpassing forecasts and creating a sizable buffer against the potential for a broader energy shock.
