US heating oil prices climbed above $4.63 per gallon, approaching record highs as refineries contend with increasingly tight supplies of refined products. The conflict in the Middle East has intensified, with Iranian-backed Houthi forces launching strikes on Saudi energy infrastructure, including the Jazan oil refinery. These attacks add to ongoing disruptions and reduced traffic through the Strait of Hormuz, while Ukrainian strikes on Russian refineries are further constraining global diesel supplies, amplifying the effects of Moscow’s existing export restrictions.
At the same time, demand is poised to rise as seasonal agricultural activity accelerates, and the onset of the winter heating season is expected to place additional pressure on distillate markets. US refineries were already running at 98% of capacity in the week ended August 28, leaving little scope to boost distillate output. According to EIA data, US distillate fuel inventories in late August were 14% below the five-year average.
