While it has fallen out of favor in recent years, heating oil is still used to heat homes and commercial buildings across the country.
The U.S. Energy Information Administration reports that in winter 2023-2024, about 4.79 million U.S. households relied on it as their main heating fuel. And about 82% of those households were situated in the Northeast part of the U.S.
If you’re one of the Americans who depends on heating oil, you should know that recent increases in gas and oil prices could make heating your home more expensive than usual this month. U.S. crude oil briefly hit $120 a barrel late Sunday, before dropping Monday afternoon to $95, and then settling at $86 after President Donald Trump said the Iran “war is very complete” later that day.
Even with the prices of oil starting to decline, there are other ways to keep your costs down and ease the burden on your wallet.
Since heating oil and gas are both refined from crude oil, heating oil costs and gas prices are closely related.
When the cost of crude oil goes up for any reason, gas and heating oil prices rise simultaneously. That’s why homes that rely on heating oil usually face higher utility bills when gas prices in their area increase.
“Crude oil is up 52.9% year to date, heating oil is up 10.5%, and natural gas is up 5.4%. Almost 5 million U.S. households depend on heating oil. For a typical home consuming 1,000 gallons of heating oil annually, that’s an increase of $1,000 for the year,” says Heather Eason of Select Power Systems in Ridgeway, SC.
Even a small change in crude oil prices can quickly increase heating costs, adding hundreds of dollars to a heating bill.
“Unfortunately, this situation puts millions of heating oil households at risk because oftentimes they can’t switch to alternative fuel. Some areas simply do not have natural gas pipelines,” explains Jon Gilbertsen, HVAC professional and president of Chris Heating & Cooling in Chicago.
Nick Barber, co-founder of Payless Power in Dallas, points out that heating oil consumers also face the challenge of having to pay for fuel deliveries in advance.
“If prices rise in January or February, there is no way to delay heating needs during extreme cold snaps. Natural gas consumers often have the advantage of utility billing plans that allow them to space their bills over multiple months,” Barber notes.
If you rely on heating oil to keep your home warm and comfortable, these tips could help save you some money.
Eason recommends asking your supplier if it offers pre-buy plans that spread costs over a 12-month period or lock in a price. Gilbertsen echoes her advice and explains that this strategy can protect you from sudden price spikes during winter and large lump sum payments.
