Heating oil futures climbed to $3.40 per gallon on Wednesday, the highest level in a month, as escalating tensions in the Middle East raised the risk of renewed disruptions to supplies from the key producing region. Iran launched attacks on tankers transiting the Strait of Hormuz, and the US responded with a series of strikes, prompting President Trump to challenge the validity of the current ceasefire and move to block Iranian energy exports.
Prices for heating oil had fallen sharply after hitting a record high of $4.70 per gallon in late March but have since rebounded, now trading more than 30% above pre-conflict levels. Crude oil inventories in both the US and China remain low, as the two major consumers have been drawing on strategic reserves to offset reduced supply, which has helped cap further gains in crude prices. Even so, the surge in diesel crack spreads continues to signal that refiners are running near capacity. Additional price support has come from a sharp increase in Chinese imports of crude and refined fuels after months of subdued buying during the war.
