Heating oil explained  

Heating oil is used for space and water heating

Heating oil and diesel fuel are closely related petroleum products called distillates. Heating oil is sold mainly for use in boilers and furnaces (for space heating) and in water heaters.

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Heating oil is dyed red.

The Internal Revenue Service (IRS) requires heating oil and other distillate fuels that are not for highway use to be colored with a red dye. The red color identifies the fuel as exempt from the federal, state, and local taxes applied to fuels sold for use on public roadways and as illegal for use in vehicles that normally operate on roadways.

Most U.S. heating oil consumers are in the Northeast

Most U.S. residential sector and commercial sector heating oil consumption occurs in the New England and the Central Atlantic regions (PDF) of the country. In 2012, New York became the first state to require ultra-low sulfur heating oil (ULSHO)—heating oil to have a sulfur content of 15 parts per million or less. Delaware and New Jersey transitioned to ULSHO in 2016, and all six New England states transitioned to ULSHO on July 1, 2018.

Biomass-based heating oil is available in some states

Nearly all of the heating oil consumed in the United States is produced from crude oil. However, some heating oil suppliers offer heating oil blends of petroleum distillate and biofuels to consumers. This blended heating oil is generally 5% biofuel by volume.

Last reviewed: October 19, 2023.