How global disruptions are impacting heating oil prices

There’s a lesser-known but important fuel that’s seen prices rise since the beginning of the War in Iran. It’s called heating oil and is used mostly in the Northeast to heat homes in the winter.

Diesel is getting all the attention lately, but heating oil prices have shot up just like diesel because of how similar they are chemically, said Tom Kloza, chief oil advisor at Gulf Oil.

“Heating oil and diesel are really the same molecule,” he said.

Between 4 million and 5 million U.S. households heat their homes during the winter with heating oil, according to the U.S. Energy Information Administration.

“A typical household in the Northeast that depends on heating oil might use anywhere between 800 and 1,000 gallons during a heating season. And obviously, with the numbers we're talking about now-that's a $6,000 bill compared to maybe a $3,500 or $4,000 bill in previous years,” Kloza said.

It’s just another way war in the Middle East — and Ukrainian attacks on Russian refineries — are straining energy markets and hurting consumers, said Joe DeLaura, senior energy strategist at Rabobank.

“Everything is connected. It's one web, and just there's different tugs at different ends of the spider web,” he said.

If we end up having a colder-than-expected winter, DeLaura said that would push up demand for heating oil even more. “Induced demand from a colder winter, it just adds a little more stress onto an extremely stressed system.”

And that could further increase the price of heating oil and diesel.