US Oil Has Nearly Doubled This Year and After Tracking Every Oil ETF These 3 Show Exactly Where the Energy Trade Goes Next
US Oil Has Nearly Doubled This Year and After Tracking Every Oil ETF These 3 Show Exactly Where the Energy Trade Goes Next
John SeetooSat, May 23, 2026 at 3:13 PM UTC
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United States Oil Fund (USO) — tracks WTI futures, has doubled to $141 as crude surged from $57 to $112.
Brent Oil Fund (BNO) better captures the geopolitical premium anchored to Middle East Hormuz shipping lanes.
DBO’s optimized roll methodology cushions downside if backwardation normalizes, making it the conservative crude play.
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West Texas Intermediate crude started 2026 at $57 a barrel and now trades near $112, a near-doubling driven by Iran-related tensions around the Strait of Hormuz and a sustained geopolitical risk premium on seaborne barrels. The three cleanest pure-play vehicles for that move are the United States Oil Fund (NYSEARCA:USO), the United States Brent Oil Fund (NYSEARCA:BNO), and the Invesco DB Oil Fund (NYSEARCA:DBO). All three have roughly doubled along with the barrel, but the mechanics behind each one tell very different stories about where the energy trade goes from here.
These funds hold crude oil futures contracts and Treasury bills posted as collateral, structured as commodity pool partnerships that issue K-1 tax forms instead of 1099s. There is no Exxon, Chevron, or pipeline operator in the basket. That distinction matters because the return engine is the futures curve itself, not corporate earnings, dividends, or capex discipline. When traders talk about playing the oil price directly, this is the toolkit.
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The Hormuz Premium And Why Futures ETFs Are The Cleanest Way To Play It
The catalyst is straightforward. Roughly a fifth of global crude flows through the Strait of Hormuz, and exchanges of fire between the US and Iran around that chokepoint in spring 2026 pushed Brent to an intraday peak of $138 on April 7. WTI hit $115 the same day. Prices have since consolidated in the $110 to $117 range, which the market reads as a persistent risk premium rather than a one-off spike.
Retail traders are openly split on whether it lasts. A wallstreetbets post titled "In 20k of USO puts because 150 dollar oil is fking stupid" drew 1,956 upvotes, while a near-identical bullish version drew roughly a quarter of that engagement. The bears are louder, but the futures curve has not flinched.
Contango, Backwardation, And Why Roll Yield Decides Your Return
Before picking a fund, understand the cost of owning futures. A futures ETF buys a contract that expires in, say, July, then sells it before expiry and buys the next month out. If the next month costs more than the one being sold (contango), the fund loses a little on every roll. If the next month costs less (backwardation), the fund earns roll yield.
This is why USO famously lagged spot WTI for years in the 2010s. Spot prices recovered, but the fund kept paying up to roll into more expensive later-dated contracts. In a tight, geopolitically charged market like 2026, the curve is more likely to sit in backwardation because buyers want barrels now, not in six months. That is a tailwind for any futures ETF, but the size of the tailwind depends on which contracts the fund actually owns.
USO: The Liquid, Obvious WTI Play
USO is the largest and most heavily traded oil ETF in the US and the default vehicle for anyone wanting WTI exposure in a brokerage account. The fund tracks near-month WTI futures, with a roll methodology revised after the 2020 negative-price episode to spread exposure across multiple front contracts rather than concentrating in a single expiry.
The return has tracked the barrel closely. USO is up about 104% year to date year to date, with shares around $141. Over one year the fund is up roughly 110%. That is the cleanest possible read on the WTI move, which is exactly what most traders want from this kind of vehicle.
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The tradeoff is that USO gives you WTI and nothing else. If the supply shock is concentrated on seaborne barrels routed through Hormuz, US domestic crude can lag the global benchmark. The fund is also the most exposed to roll cost if the curve flips back into contango once tensions ease.
BNO: The Geopolitical Premium Sits In Brent
BNO tracks near-month ICE Brent futures, the international waterborne benchmark. When a supply scare hits a chokepoint like Hormuz, Brent moves first and moves more, because that is the barrel actually getting loaded onto tankers in the Gulf. The April spike to $138 on Brent against $114 on WTI is the cleanest illustration of that dynamic this cycle.
BNO is up about 94% year to date, trailing USO slightly despite Brent itself outperforming WTI on the spot. Part of that gap is roll mechanics, part is fund-level expense drag, but the directional story is intact: anyone who believes the risk premium is anchored to Middle East shipping lanes rather than US shale economics is better expressed in BNO.
The catch is liquidity. BNO trades a fraction of USO's volume, which means wider bid-ask spreads and a less efficient hedge if you need to scale in or out quickly.
DBO: The Overlooked Roll-Optimized Pick
DBO is the contrarian choice on this list. Instead of mechanically rolling into the next front-month contract, it tracks the DBIQ Optimum Yield Crude Oil Index, which scans WTI futures up to 13 months out and selects the contract designed to maximize backwardation roll yield or minimize contango drag. In choppy or contango-heavy markets, that methodology has historically allowed DBO to outperform USO over multi-year holding periods.
In 2026 the curve has been backwardated enough that simpler funds have done fine, and DBO's 84% YTD gain trails both USO and BNO. The optimization picks slightly longer-dated contracts, which dampens the response when spot prices spike on a Hormuz headline but cushions the downside if backwardation flattens.
For a trader playing the next leg of the surge, DBO is the conservative way to stay long crude exposure without taking the full hit if the curve normalizes. It is also the least-discussed of the three on retail forums, with essentially no Reddit chatter compared to USO's flood of options posts. That obscurity is part of the appeal.
Which Fund Fits Which Trader
USO is the right tool for the trader who simply wants WTI to keep rising and values liquidity above all else. BNO is the sharper instrument if the thesis is specifically about Hormuz, sanctions, or seaborne supply disruption, because the international benchmark is where that premium lives. DBO is the pick for someone who wants crude exposure without betting the entire position on the curve staying backwardated.
One warning applies to all three. Futures ETFs are tactical instruments. The roll mechanics that have been a tailwind in 2026's tight market become a steady drag the moment the curve flips back into contango, which is the default state for crude over long stretches of history. These funds are built for expressing a tactical view over weeks or months. Holding through a normalization in Hormuz risk and a return to contango is the most reliable way to give back the gains the rally just delivered.
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Source: “AOL Money”
