US heating oil prices fell toward $4.00 per gallon on Monday, retreating from a more than three-month high as signs of a pause in hostilities between Iran and the US eased supply concerns. A senior Iranian official stated that Tehran would halt attacks if Washington also refrains from striking, noting that this message has already been delivered to the US. Washington has held off on airstrikes since late Friday after nearly two weeks of attacks.
The pause in military action coincided with Oman-mediated talks in Tehran on a provisional arrangement to manage shipping through the Strait of Hormuz, a step that could lessen potential disruptions to oil flows. Outside the Middle East, Russian fuel supplies remained tight, with fewer than half of the refineries damaged by Ukrainian drone strikes back in operation, leaving around 45 million tonnes of annual refining capacity offline. Additionally, forecasts for warmer-than-normal weather through August 7 are expected to bolster power-sector demand.