Winter Heating Costs Soar as Global Oil Strains Reach Critical Levels

Households in the US are bracing for higher heating costs this winter, according to the National Energy Assistance Directors Association. The organization estimates that households will spend $1,030 on heating from mid-November through mid-March, an increase of $82 from last year.

This comes as a result of the global strain on oil caused by the ongoing conflict in Iran and Ukraine's strikes on Russian oil refineries. The Strait of Hormuz's closure has disrupted crude oil shipments and reduced exports of refined products, leading to higher prices for electric and gas utilities.

The price of diesel fuel has surged to an all-time high, with prices exceeding $6 a gallon. This is part of the reason why U.S. heating oil futures have risen nearly 30% since June.

However, El Niño may bring some relief by providing warmer winter temperatures in much of the country. NEADA notes that the outlook for average spending on heat would be more problematic without these warmer temperatures.