Oil Prices Spike on Middle East Tensions — Here Are 3 Energy ETFs Gaining Attention

Oil prices surged after the U.S. and Israel struck Iran over the weekend, raising supply concerns in the Middle East. U.S. crude jumped more than 7% at the time of writing, while Brent rose about 8%, prompting investors to look for ways to join the rally. Instead of picking individual oil companies, many investors are turning to exchange-traded funds.

Using TipRanks’ Comparison tool, we identified three energy ETFs drawing attention: the Energy Select Sector SPDR Fund (XLE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the United States Oil Fund (USO).

Let’s take a look at these ETFs in detail.

Energy Select Sector SPDR Fund (XLE)

The Energy Select Sector SPDR Fund (XLE) provides broad exposure to the largest U.S. oil companies. The ETF is heavily weighted toward integrated majors, with Exxon Mobil (XOM) and Chevron (CVX) making up a significant portion of the portfolio. Because these firms generate strong cash flow when crude prices rise, XLE typically benefits during periods of higher oil prices.

The fund holds 24 companies and manages about $37 billion in assets. It also offers a low expense ratio of 0.08% and a dividend yield near 2.6%, making it a common choice for investors seeking relatively stable energy exposure rather than trading individual oil stocks.

SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) focuses on smaller and mid-size exploration companies rather than the oil majors. Its holdings include producers such as Texas Pacific Land (TPL), Venture Global (VG), and Occidental Petroleum (OXY), meaning performance is closely tied to the price producers receive for each barrel of oil.

The ETF holds 52 stocks with about $2.4 billion in assets. Because these companies are more sensitive to crude prices, XOP often moves more sharply than broader energy funds when oil rises, but it can also decline faster if prices pull back.

United States Oil Fund (USO)

The United States Oil Fund (USO) takes a different approach. Unlike XLE and XOP, it does not invest in oil companies. Instead, the fund tracks crude oil futures contracts, so its price tends to follow the daily movement of oil itself rather than corporate earnings.

USO manages roughly $1.1 billion in assets and carries a higher expense ratio of about 0.60%. Investors often use it as a direct way to gain exposure to crude prices without trading futures, especially during geopolitical events that quickly move the oil market.