Price Shock: Gulf War adds home heating oil to Suffolk County residents' gas, diesel woes

[WASHINGTON] No force is more powerful in American politics than the calendar, which means holidays, elections, and the need for home heating oil to fend off the approaching chills of winter.

President Donald J. Trump’s armed response to Iran’s nuclear weapons program has had many different phases and lulls, but now the focus is on getting oil out of the Strait of Hormuz every day.

Before the war, roughly 24 million barrels passed out of the strait daily. Recently, the total has reached roughly 16 million barrels per day–not great, but enough to keep the wheels turning.

Twenty percent of the world’s oil passed through that chokepoint before the conflict, a transportation solution that no longer makes sense beyond necessity.

By now, American refineries are already adjusting their mix, switching up diesel production for home heating oil that retailed to residents in January for $3.91 per gallon and now costs $5.48 per gallon.

Let’s game that out. No one tops off their 275-gallon tank, even to allow for expansion, so your 250-gallon delivery costs $1,370. In January, the same delivery cost $977.50.

Nothing like a 40 percent jump to get your attention–and your blood boiling, especially now when homeowners are scheduling deliveries as part of their seasonal preset.

One homeowner told me that when his delivery came, instead of taping the invoice to the door, which was the regular practice, the man stuck it in the mailbox.

“It was like he was afraid he might have to speak to me about it,” the homeowner said.

This is still below the May 2022 high of $6.21 per gallon, a spike triggered by Russia’s intervention in the Ukrainian Civil War that the coming of spring softened.

That is not to say that the price does not swing the other way; during the COVID-19 pandemic and its economic shutdown, home heating oil fell to $2.43 per gallon in May 2020.

The current spike comes as inventories for diesel and home heating oil are 13 percent below the five-year average, because distributors are selling out of inventory bought at lower prices, rather than going into the market.

Refineries produce home heating oil for Suffolk County homes from Canadian crude, exempt from the president’s tariffs; however, oil is a world market, and with oil topping $100 per barrel, there are buyers looking to take the Canadian crude away.

Granted, home heating oil is as dominant as it once was in Suffolk County, or anywhere else, for that matter. Of the more than 500,000 homes in the county, 225,500 rely on home heating oil, 44 percent. In 2001, there were fewer homes in the county, 470,000, but nearly 300,000 home heating oil residential units, 63 percent.

Clearly, the president’s calculations regarding kicking off the Third Gulf War did not consider home heating oil prices in Suffolk County, but here we are.

Recently, the president has signaled that he understands that the war will hurt his party, so there is every chance the war will be won-and-done before the midterm election. If Trump sticks the landing, the Republicans could end up winning big.

The end of the war will also unleash pent-up oil supply that will flood the market–bringing relief to car drivers, truckers, railroad operators, airlines–and, of course, Suffolk County homeowners.