Oil ETFs Rally Amid Intensifying U.S.-Venezuela Tension

The maritime conflict between the United States and Venezuela has reached a fever pitch over the past two weeks, marked by direct naval interventions. The conflict centers on a U.S.-led "blockade" of oil tankers and lethal military strikes against vessels in the Caribbean.

When U.S. forces seized the Skipper, an oil tanker transporting Venezuelan crude, on Dec 10, 2025, tension between the two nations spiked significantly and has been escalating since then. While such conflicts mar global geopolitics, in terms of market sentiment, the dispute pushed up oil prices. 

Evidently, oil prices surged at the start of this week, with Brent crude climbing 2.7% to over $62 a barrel (as per a CNBC report), the catalyst being a weekend operation where U.S. forces, including the Coast Guard, attempted to intercept an oil tanker near Venezuela. This single event added a significant geopolitical risk premium to oil prices, further reinforced by concurrent reports of Ukrainian attacks on Russian energy infrastructure in the Black Sea, another major oil-exporting region.

For investors, this creates a powerful catalyst for oil-focused Exchange-Traded Funds (ETFs). These funds, which track the price of oil or the performance of energy companies, are highly sensitive to such supply-side shocks. The price surge from $58 to over $62 per barrel over a single day translated directly into gains for ETFs holding oil futures. 

Similarly, ETFs composed of U.S. exploration and production companies stand to benefit from higher realized prices for their output, boosting their revenues and profit margins.

Before highlighting the oil ETFs that have been rallying and deserve a spot on your watchlist, let’s take a closer look at how the U.S.-Venezuela conflict could impact the oil market in days ahead and how that momentum may benefit oil ETF investors.

Escalation, Oil Prices & ETF Momentum

The U.S. interception of the Skipper and the pursuit of other Venezuelan tankers in international waters have raised fears of incremental supply disruption in the global oil market, even though Venezuelan crude itself accounts for only about 1% of global supply. This fear has sent ripples through global bourses, forcing a risk premium back into crude prices. 

This momentum is built on a convergence of deteriorating fundamentals and heightened risk. While holiday trading volumes are lower, the market is compelled to maintain a risk premium as long as the standoff continues. 

For U.S. energy companies, this environment is advantageous, as it strengthens their competitive position and cash flow generation. The blockade on Venezuela can affect 600,000 barrels per day of oil exports from the country, as per ING estimates (as cited in Yahoo Finance). With the U.S. effectively removing sanctioned Venezuelan barrels from the market, domestic producers will fill the supply gap, especially for complex Gulf Coast refineries that rely on heavy crude grades.

This shift in market dynamics naturally puts the spotlight on oil ETFs as investors seek to capitalize on the resulting price volatility and the strengthened position of Western energy majors.

Oil ETFs to Watch

Considering the aforementioned discussion, as the U.S. military is actively pursuing additional tankers in international waters amid mounting supply risks, it is reasonable to expect the upward pressure on energy benchmarks to sustain in the near term. This environment makes the following oil-price tracking ETFs, as well as energy-focused ETFs with high exposure to U.S.-based oil producers, critical instruments for traders navigating the current geopolitical storm.

ProShares Ultra Bloomberg Crude Oil UCO

This is the only ETF that targets 2x the daily returns of oil futures. It had a net asset value (NAV) of $19.74 as of Dec. 22, 2025. 

UCO has gained 4.3% since Dec. 19, 2025, following the United States’ latest weekend operation to intercept an oil tanker near Venezuela. The fund charges 95 basis points (bps) as fees. It traded at a volume of 3.93 million shares in the last trading session. 

ProShares K-1 Free Crude Oil ETF OILK

This fund offers exposure to crude oil futures. It had NAV of $37.76 as of Dec. 22, 2025. 

OILK has gained 2.2% since Dec. 19, 2025. The fund charges 69 bps as fees. It traded at a volume of 0.04 million shares in the last trading session. 

United States Brent Oil ETF BNO

This fund, with net assets worth $100.1 million, tracks the daily price movements of Brent crude oil. It had an NAV of $28.61 as of Dec. 22, 2025. 

BNO has gained 2.4% since Dec. 19, 2025. The fund charges 114 bps as fees. It traded at a volume of 0.40 million shares in the last trading session. 

Vanguard Energy ETF VDE

This fund, with net assets worth $7.1 billion, provides exposure to 109 companies involved in the construction or provision of oil rigs, drilling equipment, and other energy-related service and equipment, or the exploration, production, marketing, refining, and/or transportation of oil and gas products. Its top three holdings include U.S.-based oil majors — Exxon Mobil XOM (22.02%), Chevron CVX (14.89%) and ConocoPhillips COP (5.56%). 

VDE has gained 1% since Dec. 19, 2025. The fund charges 9 bps as fees. It traded at a volume of 0.50 million shares in the last trading session. 

State Street Energy Select Sector SPDR ETF XLE

This fund, with assets under management (AUM) worth $26.27 billion, provides exposure to 22 companies from the oil, gas and consumable fuel, energy equipment and services industries. Its top three holdings include U.S.-based oil majors — XOM (23.28%), CVX (17.28%) and COP (7.02%).

XLE has risen 1% since Dec. 19, 2025. The fund charges 8 bps as fees. It traded at a volume of 23.70 million shares in the last trading session. 

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