US heating oil futures rose toward $4.20 per gallon, their highest level since early April, as escalating conflict in the Middle East heightened fears of disruptions to global refined fuel supplies. Iran declared that its ceasefire with the US had effectively collapsed, with both sides expanding attacks from purely military targets to critical infrastructure, leaving little hope of a return to the fragile truce.
Supply concerns were further aggravated by continued Ukrainian strikes on Russian oil refineries, following Russia’s diesel export ban imposed earlier this month. Seasonal refinery maintenance and years of refinery closures in both the US and Europe have also tightened fuel availability, driving US refining margins to record highs.
While US distillate fuel inventories rose by 4.6 million barrels in the week ending July 10, according to EIA data, total stockpiles remain well below their five-year seasonal average, underscoring the persistence of the supply shortfall.
