Heating oil futures for delivery at New York Harbor extended losses to around $3.70 per gallon, hovering near a two-week low, as markets assessed the prospects of a potential US–Iran agreement. The situation remained tense after reports that the US military conducted a self-defense strike in Iran, highlighting the fragility of ongoing diplomatic efforts. This followed President Donald Trump’s comments that talks with Tehran were making progress, with negotiations reportedly covering a possible US lifting of its blockade and Iran’s reopening of the Strait of Hormuz.
Since the war began in March, exports of distillate products from the region have been largely suspended, disrupting refinery operations and driving heating oil futures to a record high of $4.60 per gallon that month. More recently, US distillate inventories unexpectedly increased in mid-May, in contrast with a decline in gasoline stocks. This divergence suggests refiners have been prioritizing the production of diesel and jet fuel to meet acute global transportation fuel shortages.
