US heating oil futures climbed to $3.70 per gallon, their highest level since October 2022, and were on track for a weekly gain of more than 40%, as escalating tensions in the Middle East nearly brought shipments through the Strait of Hormuz to a standstill. The conflict involving the United States, Israel, and Iran showed no signs of easing and has now entered its seventh day, with Iran launching missile and drone attacks on an oil refinery in Bahrain. Israel responded with airstrikes on Tehran, while the US temporarily closed its embassy in Kuwait.
Against this backdrop, President Donald Trump signaled that his administration is preparing near-term measures to rein in surging energy prices. Options under consideration include drawing on the US Strategic Petroleum Reserve, relaxing fuel-blending regulations, and permitting the Treasury to trade oil futures. On the supply side, US EIA data showed distillate inventories unexpectedly rose by 0.4 million barrels, compared with expectations for a 2.6 million-barrel decline.
