Why Have Gasoline and Heating Oil Futures Diverged?

As energy markets enter spring, gasoline prices tend to strengthen seasonally. Heating oil futures are a proxy for distillate fuels, including diesel and jet fuel. While oil and oil products rose to their highest prices in years amid supply concerns, heating oil futures have led the way higher, as distillates are the most sensitive to Middle Eastern crude oil. 

The difference between the WTI and the Brent benchmark prices

While there are many petroleum grades and qualities, the two benchmark crude oil prices are West Texas Intermediate, traded on the CME’s NYMEX division, and Brent North Sea, traded on the Intercontinental Exchange. While WTI crude oil is the pricing basis for around one-third of the world’s petroleum, Brent crude oil reflects the price of the other two-thirds. The other grades and qualities trade at premiums or discounts to the two benchmarks. 

WTI tends to serve as the benchmark for North American production, while Brent serves as the pricing mechanism for crude oil produced in Europe, Russia, Africa, and the Middle East.

Both WTI and Brent are light, sweet crude oil, meaning they have lower sulfur contents than other petroleum. However, WTI is slightly sweeter, with a lower sulfur content than Brent crude oil. Lower sulfur content makes WTI the ideal crude oil for gasoline processing, while Brent’s higher sulfur content supports refining into distillate products. 

Oil rose to its highest price since 2022

The monthly continuous seven-year NYMEX WTI crude oil chart highlights the explosive move in March 2026. 

NYMEX WTI futures rose 95.48% from a low of $61.12 in February 2026 to a high of $119.48 per barrel in March 2026.

Meanwhile, ICE Brent crude oil futures rose 83.16% from a low of $65.19 in February 2026 to a high of $119.40 per barrel in March 2026.

The outperformance of WTI crude oil from the February low to the March high was due to two factors. First, since WTI is processed into gasoline, demand for gasoline rises as the market moves towards the peak driving season in spring and summer. Second, and perhaps most significantly, the blockage of the Strait of Hormuz, through which 20% of seaborne petroleum travels, affected Brent crude oil supplies by tanker, and attacks on regional pipelines further impacted regional supplies. WTI from North America has not been affected, boosting demand for WTI. 

Gasoline and gasoline refining spread prices moved higher

The monthly continuous NYMEX RBOB gasoline futures chart displays the rally from the February low to the March high. 

NYMEX RBOB gasoline futures rose 84.9% from a low of $1.8305 in February 2026 to a high of $3.3854 per gallon wholesale in March 2026.

Meanwhile, the gasoline crack spread, which reflects the per-barrel differential for refining a barrel of WTI crude oil into gasoline, rose 161.6% from $15.47 to $40.47 per barrel. The 2026 high in gasoline and gasoline cracks remained below the 2022 high. 

Heating oil and distillate refining spread prices exploded

The monthly continuous NYMEX RBOB gasoline futures chart displays the rally from the February low to the March high. 

NYMEX heating oil futures rose 102.2% from a low of $2.2810 in February 2026 to a high of $4.6130 per gallon wholesale in April 2026.

Meanwhile, the distillate crack spread, which reflects the per-barrel differential for refining a barrel of WTI crude oil into heating oil and other distillate fuels, rose 160.6% from $35.67 to $92.95 per barrel, an all-time high for the refining margin. 

As spring approaches, gasoline refining spreads tend to far outperform distillate refining spreads, but the war in the Middle East bucked the seasonal trading pattern in 2026. 

The issues to watch for the path of least resistance of distillate prices over the coming weeks and months

Since distillates are most closely linked to Brent crude oil supplies and prices, the following factors will impact crude oil, gasoline, and most significantly, distillate fuel prices over the coming weeks and months. 

The Strait of Hormuz is critical to prices, as 20% of Brent crude oil destined for Asia and Europe passes through the sea passage. If the Strait opens after the U.S. blockade and mine sweeping, prices will likely drop. However, if Iranian attacks on the Strait and on oil production, refining, pipelines, ports, and vessels in other Middle Eastern countries increase, prices could experience further spikes.

The Houthis, an Iranian proxy in Yemen, have threatened sea passages in the Red Sea, another critical chokepoint for global crude oil supplies. Houthi attacks on vessels could cause severe supply shortages. 

Increasing U.S. production could replace some Middle Eastern supplies as Asia and Europe turn to the U.S. to meet their requirements. 

The bottom line is that crude oil and oil product prices will be volatile. A peaceful settlement could cause a substantial price decline, while any escalation of the conflict could send prices appreciably higher. Volatility in markets creates trading opportunities. However, any risk position in crude oil and oil products requires careful attention to risk-reward dynamics in the current environment.