FX.co ★ Heating Oil Climbs to 3-½ Year High

Heating oil futures climbed more than 6% to around $3.90 per gallon, their highest level since November 2022, as markets continued to react to severe supply disruptions linked to the war involving Iran. The strategic Strait of Hormuz remained effectively closed, forcing major Gulf producers to significantly curb output. Production in the region has already been cut by roughly 6%, and deeper reductions from Middle Eastern suppliers are still possible. Several vessels have also been attacked near the narrow shipping corridor, underscoring mounting risks to maritime transport. In response, the International Energy Agency announced a coordinated release of 400 million barrels from emergency reserves—the largest drawdown on record—including 172 million barrels from the United States and 80 million barrels from Japan. However, this action has so far failed to calm trader concerns.