An example of an upstream oil ETF is the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). Oil exchange-traded funds (ETFs) are investment vehicles that enable anyone to gain increased exposure to the oil market through a single investment. Oil ETFs provide investors with distinct ways to make a broad bet on the oil market through specific strategies. Get a piece of the pie is by investing in an oil exchange traded fund (ETF). An ETF is a type of fund that collects assets and trades them throughout the day as a sort of “package deal” — in much the same way individual stocks are traded.

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• Please note that, whilst we endeavour to provide accurate and useful information, the Content may not be wholly accurate or up-to-date and is subject to change, often at very short notice.
• Investing in oil is typically reserved for advanced commodity traders — if you’re trying to invest in the commodity itself.
• It typically holds shares of companies ranging from integrated energy giants to equipment and service providers.
• One minute the sun’s shining (aka prices are booming), the next you’re caught in a downpour of falling profits and political drama.

So don’t expect to see any solar, wind or nuclear-focused ETFs on the list. Middle East tensions, the Ukraine war and ongoing supply cuts from the Organization of the Petroleum Exporting Countries (OPEC) are supporting higher prices for crude oil in 2024. JustETF is the leading knowledge base for your ETF strategies. We provide guidance with ETF comparisons, portfolio strategies, portfolio simulations and investment guides.

The oil industry is challenging for investors because best oil etf of its volatility and other risk factors. Saudi Aramco and ExxonMobil are the largest energy companies by market cap. The Motley Fool analyzed billionaire-led hedge funds to determine which energy stocks the ultra-wealthy are invested in.

How to Find the Top Oil ETFs?

• Downstream companies take the raw materials produced by upstream activities and convert them into finished products such as gasoline, diesel fuel, jet fuel and petrochemicals.
• It’s cheap to hold, packed with oil royalty, and tends to perform well when oil prices climb.
• The vast majority are futures contracts to buy and sell crude oil from corporations based in the United States.

Oil ETFs offer investors a way to participate in the crude oil market without directly trading futures contracts or physically storing oil. The energy sector is constantly influenced by factors like global demand, production levels, and geopolitical events. The United States Oil Fund is an exchange-traded security that provides investors with more direct exposure to oil prices.

That dynamic is what draws traders and short-term investors looking to ride a price rally. Oil ETFs that track the price of crude oil may be more likely to rise than fall in 2024. Middle East tensions and the war in Ukraine are not expected to resolve in the short term and OPEC’s supply cut may continue to support higher prices for oil through midyear. Lower supply tends to push oil prices higher, especially when demand remains strong. Downstream activities in the oil and gas industry involve the refining, processing and distribution of crude oil and natural gas products.

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Therefore, an oil ETF focuses on the oil industry and everything related to it. Such firms extract crude oil or natural gas, process and refine it, and then sell it in various forms. When energy prices rise, it means better margins on those products, stronger earnings and, ultimately, higher stock prices.

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Global giants such as Shell (SHEL) and BP in the U.K., TotalEnergies (TTE) in France and Canadian Natural Resources (CNQ) and Enbridge (ENB) in Canada are all major players. It’s also worth noting that this fund processes the Schedule K-1s sent by the MLPs and sends its investors a Form 1099. That reduces the tax complexities of investing in MLPs, which can be a deterrent for some investors. Copyright © 2025 FactSet Research Systems Inc.Copyright © 2025, American Bankers Association. CUSIP Database provided by FactSet Research Systems Inc.

Some of the fund’s top holdings include major domestic oil producers like ConocoPhillips, Marathon Petroleum Corporation and Phillips 66 — all of which have seen positive 1-year returns of over 7%. Some of the biggest players in the energy sector today can trace their corporate roots directly to the 34 operating companies created by Standard Oil’s historic breakup. The list features Exxon Mobil (XOM), Chevron (CVX), BP (BP) and Marathon Petroleum (MPC), among others. Energy ETFs can help investors earn income, hedge against inflation or speculate on commodity prices. Contango is when futures prices are higher than spot prices. This can erode returns in ETFs that roll over near-month futures contracts, as they are forced to repeatedly buy higher-priced contracts.

The top oil ETFs in 2025

UCO aims to double the daily price movement of crude oil, which means you can win big – or lose even faster. Invesco’s S&P SmallCap Energy tracks the S&P SmallCap Energy index. It focuses on smaller energy companies listed in the U.S. Check out our list of some of the most profitable oil ETFs on the market to see if the oil sector is right for you.

While the benchmark differs from that of VDE or XLE, the overall exposure and historical performance are very similar. With nearly identical fees and trading liquidity, FENY also works well as a tax-loss harvesting partner for either VDE or XLE. The fund is still market cap-weighted though, so Exxon Mobil and Chevron dominate but to a lesser degree than in XLE. Today, there’s no reason for prospective energy investors to go piecemeal trying to put Standard Oil back together. There are many good reasons to skip the stock-picking altogether and opt for an energy ETF instead. Investing in China offers exposure to the world’s second-largest economy, presenting unique growth opportunities driven by its vast consumer market, technological advancements, and ongoing development.

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Top stories, top movers, and trade ideas delivered to your inbox every weekday before and after the market closes. You can find Benzinga’s recommended oil ETFs on the list above. The SPDR S&P Oil & Gas Equipment & Services ETF tracks the S&P Oil & Gas Equipment & Services Select Industry Index and currently has about $286 million in assets.

SEC fillings and other documents provided by Quartr.© 2025 TradingView, Inc. The table shows the returns of all oil ETFs/ETCs in comparison. All return figures are including dividends as of month end.

SPDR S&P Oil & Gas Equipment & Services ETF (XES)

They are an easy way to invest in oil markets, but they do carry risk. Upstream activities in the oil and gas industry involve the exploration, drilling, and production of crude oil and natural gas. Upstream companies are responsible for finding and extracting these hydrocarbons from the ground.

That said, if a recession begins to look more likely in 2025, oil prices could come back down in anticipation of lower demand. Oil industry ETFs provide investors with an opportunity to tap into the largest commodity market in the world. When choosing an oil ETF or ETC one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all oil ETFs/ETCs with details on size, cost, age, income, domicile and replication method ranked by fund size. The fund has over $410 million in holdings and sees an average daily trading volume of over 300,000 shares.

An inverse oil ETF is a fund that is short the price of oil, meaning it is betting on the price of oil to fall. Crude oil ETFs track the price of the unrefined, crude oil. You’ve got geopolitics, climate pressures, dodgy balance sheets, and management missteps to contend with.