New Surge in U.S. Energy Markets as Hormuz Closure Threat Escalates Supply Risks

New York | EcoPulse24

Bullish pressures continued to mount in U.S. energy markets on Tuesday, with futures for natural gas, heating oil, and gasoline all rising amid escalating geopolitical risks linked to threats of closing the Strait of Hormuz and intensifying military operations involving the U.S., Israel, and Iran.

In the natural gas market, futures climbed around 2% to trade near $3 per million British thermal units, extending the previous session’s 3.5% gain. The move followed Iran's announcement of closing Hormuz and its warning to target any vessel attempting to cross the strategic chokepoint, through which about 20% of global LNG exports - mostly from Qatar - pass. The U.S. market is currently running a deficit of about 0.3% compared to the five-year average, boosting prospects for increased U.S. LNG exports if Qatari supplies remain disrupted.

Heating oil futures jumped over 4% after an 11% surge in the previous session, reaching their highest level since October 2023. Markets are focused on the risk of a full Hormuz closure, as Washington pledged all necessary actions while Tehran threatened any ship passing through. The strait handles about one-fifth of global oil shipments and significant gas volumes, making it a pivotal point in risk pricing.

Gasoline prices rose 1.3% to around $2.41 per gallon, the highest since July 2024. Rising war-risk insurance costs have slowed shipping through Hormuz, intensifying supply shortage fears. While Iran accounts for less than 5% of global oil production, its geographic position gives it outsized influence over energy flows through the strait.

To calm markets, eight OPEC+ countries announced plans to boost output by over 200,000 barrels per day starting next month, following a freeze in increases during Q1. However, the effectiveness of this move depends on the ability of member states to maintain secure maritime flows.

Simultaneous moves in gas, heating oil, and gasoline reflect a shift in risk premium from crude to refined products, directly impacting costs for U.S. consumers and businesses.

EcoPulse24 Analysis:
Markets are repricing energy based on a scenario of prolonged disruption rather than a fleeting tension. Rising gas and refined fuel prices underscore that logistical risks in Hormuz are central to the global supply-demand equation. Even with OPEC+'s production hike, continued shipping threats could expand price pressures, stoking new inflationary waves and bringing monetary policy back into focus while heightening global market sensitivity to Middle East developments.