US heating oil futures traded above $3.60 per gallon in early June, stabilizing after recent declines, as renewed uncertainty over US–Iran negotiations fueled concerns about prolonged energy supply disruptions from the Middle East. Media reports indicated that Iran had suspended indirect talks with Washington over Israel’s operations in Lebanon, in contrast to President Donald Trump’s assertion that negotiations with the US were still ongoing. These conflicting accounts have kept markets on edge and contributed to heightened volatility in energy prices.
Distillate exports from the region have been heavily disrupted since the conflict began in March, pressuring global refinery operations and pushing heating oil futures to a record high of $4.60 per gallon that month. Underscoring the ongoing tightness in supply, US distillate inventories—including diesel and heating oil—fell by more than 2.0 million barrels in the week ended May 22, exceeding expectations for a 1.0 million-barrel draw.
