Bet on these Oil ETFs as Brent Crude Rallies 2% Amid Fading Peace Hope – May 26, 2026
Key Takeaways
- Brent crude rose 2% above $98 after U.S. strikes in Iran weakened ceasefire hopes.
- USO surged 72% since Feb. 28 as Strait of Hormuz disruptions tightened oil supplies.
- Oil ETFs like BNO gained on expectations of prolonged supply shortages and high crude prices.
Brent crude oil rallied 2% on May 26, 2026, climbing back above $98 per barrel in Asia trading as U.S. military strikes against Iranian forces dashed hopes for a quick end to the three-month-old Gulf conflict. This sudden reversal followed a 7% plunge a day earlier, triggered by premature optimism over a diplomatic breakthrough in the Middle East.
As ceasefire talks stall, the renewed price surge is injecting fresh upward momentum into the energy sector. Higher crude prices translate directly into wider margins for upstream producers and refiners, boosting the valuations of oil companies and, by extension, the exchange-traded funds (ETFs) that hold them or offer direct exposure to raw commodity prices.
As the broader energy sector continues to witness widespread volatility amid heightened geopolitical risk and tight physical supplies, analyzing the mechanics of this ongoing conflict is essential. By understanding the timeline of the Iran-US war and its structural impact on the oil industry, investors can better position themselves to leverage the specific oil ETFs currently gaining immense traction.
Iran-US War Chronology & Impact on Oil
The current energy crisis disrupting global supply chains began three months ago, when Tehran effectively halted nearly all non-Iranian shipping through the Strait of Hormuz, a strategic chokepoint that handles roughly one-fifth of global oil flows. The disruption followed multiple airstrikes carried out by joint U.S.-Israeli forces across Iran in late February.
The resultant closure of the Strait has choked off major oil flows, leading to severe inventory drawdowns. To this end, UBS reported that observed global oil inventories fell by a combined 246 million barrels in March and April alone, leaving the market “strongly undersupplied” (as cited in CNBC).
This supply crunch has been consistently pushing up oil prices in the global market for the past couple of months. Evidently, the price of Brent crude futures – the global oil benchmark – has risen 72% since January, from $61 to around $105 a barrel as of May 21 (according to data from the Institute for Energy Economics and Financial Analysis).
In the latest development in this conflict, the U.S. military has conducted “self-defense strikes” in southern Iran, targeting vessels attempting to lay mines and missile launch sites. The action came even as Iranian negotiators were meeting with Qatari mediators, underscoring the fragility of the stop-and-start peace talks that had raised hopes for de-escalation in recent weeks.
Consequently, the global oil supply-demand imbalance will continue in the near term, thereby pushing up oil prices and boosting oil companies’ profitability.
Industry Outlook: Center Stage for Oil ETFs
The near-term outlook for the oil industry, in terms of price, remains bullish yet highly volatile. While U.S. Secretary of State Marco Rubio noted that negotiating a deal could “take a few days,” previous setbacks are keeping traders cautious.
To this end, many experts believe that even if a formal memorandum of understanding is signed by U.S. President Donald Trump and Tehran, returning to a baseline status quo will take three to six months due to damaged infrastructure, regional mine clearing, and the time required to bring offline refineries back to full capacity. This creates a plausible, structurally high “floor” for crude prices well above pre-war levels of $70 per barrel.
This high oil price environment offers the center stage for betting on oil ETFs, which provide leveraged or direct exposure to this price strength.
Oil ETFs to Bet on
Investors looking to capitalize on the current oil price rally should consider gaining exposure to the following ETFs that have shown strong momentum amid the ongoing supply-chain crisis:
United States Oil ETF (USO – Free Report)
This fund, with net assets worth $1.84 billion, tracks the daily price movements of light, sweet crude oil. USO has surged 72% since Feb. 28, 2026, when the U.S.-Israel joint force attacked Iran.
The fund charges 70 basis points (bps) as fees. It traded at a good volume of 7.42 million shares in the last trading session.
VanEck Oil Services ETF (OIH – Free Report)
This fund, with net assets of $2.51 billion, provides exposure to 26 U.S.-listed companies in the upstream oil services sector, including firms engaged in oil equipment, oilfield services and drilling. OIH has gained 11.8% since Feb. 28, 2026.
The fund charges 35 bps as fees. It traded at a volume of 0.35 million shares in the last trading session.
Invesco DB Oil ETF (DBO – Free Report)
This fund, with a market value worth $297.8 million, offers exposure to futures contracts on light sweet crude oil. DBO has soared 55.8% since Feb. 28, 2026.
The fund charges 73 bps as fees. It traded at a volume of 0.77 million shares in the last trading session.
United States Brent Oil ETF (BNO – Free Report)
This fund, with net assets worth $843.7 million, tracks the daily price movements of Brent crude oil. BNO has soared 58% since Feb. 28, 2026.
The fund charges 114 bps as fees. It traded at a good volume of 3.98 million shares in the last trading session.
