Oil War Stocks and ETFs Surge on Growing U.S.–Iran Conflict Risk

Oil war stocks and energy ETFs are rallying as speculation of a potential U.S. conflict with Iran lifts crude prices and raises the risk of a major disruption in the Strait of Hormuz, creating short‑term upside for select oil war stocks and funds.

With speculation of a potential conflict with Iran, oil prices are up another $1.31 to $66.50. And depending on whether we go to war and what could potentially happen in the Strait of Hormuz, investors may want to jump into potential oil war stocks.

We have to consider that Iran is one of the world’s leading suppliers, with its government making it clear that it will retaliate if the U.S. attacks. This could eventually lead to a full blockage of the Strait of Hormuz or restricted access.

• Iranian leaders have warned that any U.S. attack could spark a regional war.
• Iran could use allied militias and proxy groups to attack U.S. allies and interests throughout the Middle East.
• The Strait of Hormuz, a chokepoint for about 20 million barrels of oil per day of global supply, could be targeted, threatening global flow.

In the U.S., “Top national security officials have told Mr. Trump the U.S. military is ready for potential strikes on Iran as soon as Saturday, but the timeline for any action is likely to extend beyond this weekend, sources familiar with the discussions told CBS News, adding that President Trump had not yet made a final decision about whether to strike Iran.”

We should also consider that any conflict between the U.S. and Iran would probably be larger and longer than a few days, potentially a multi-week campaign rather than a quick strike, which would create significant upside potential for oil.

Not only are oil stocks, such as Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), gushing higher on speculation of war, but so are related ETFs such as the Energy Select Sector SPDR ETF (NYSEARCA: XLE).

Why You Need to Be Cautions With Oil War Stocks

The last time the U.S. hit Iran was in late June 2025, when the U.S. carried out air and missile strikes on several of Iran’s nuclear facilities — including the Fordow, Natanz, and Isfahan sites — as part of the broader conflict involving Iran and Israel. 

Prior to the attack, oil traded at about $60, spiking to about $78 before plummeting back to earth following the nuclear facilities’ attack. 

We could see a similar situation play out this time, as well.

Unfortunately, it’s a wait-and-see at this point. Right now, simply on speculation of an attack on Iran, investors may want to consider a position in Exxon Mobil or Chevron. Or, to take an all-of-the-above approach, here are three ETFs to consider.

Oil War Stocks: SPDR Energy Select Sector ETF (XLE)

With an expense ratio of 0.09%, the Energy Select Sector SPDR Fund ETF (NYSEARCA: XLE) provides exposure to companies in the oil, gas, and consumable fuel, energy equipment, and services industries.

The ETF is heavily weighted toward large, established energy giants, which account for a significant portion of its total holdings and help provide more resilience during market downturns. Plus, not only does an ETF allow for diversification, but you can buy it for less than $47 a share, which, by the way, is cheaper than most of the ETFs 2 holdings.

Some of those holdings include Exxon Mobil, Chevron, ConocoPhillips (NYSE: COP), Williams Cos. (NYSE: WMB), and EOG Resources (NYSE: EOG).

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

With an expense ratio of 0.35%, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA: XOP) ETF provides exposure to 51 oil and gas exploration and production segment of the S&P TMI, which comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing, as noted by State Street SPDR. 

Some of the fund’s top holdings include Callon Petroleum (NYSE: CPE), SM Energy Company (NYSE: SM), Devon Energy Corp. (NYSE: DVN), EOG Resources, and ConocoPhillips. 

XOP also has an extremely high correlation with the price of oil, making it a suitable choice for investors seeking direct leverage to upward movements in crude oil prices.

Oil War Stocks: iShares Global Energy ETF (IXC)

With an expense ratio of 0.40%, The iShares Global Energy ETF (NYSEARCA: IXC) seeks to track the investment results of an index composed of global equities in the energy sector. Some of its 50 holdings include Exxon Mobil, Chevron Corporation, BP PLC (NYSE: BP), Total SA, and EOG Resources.

It’s also one of the few options for investors seeking global exposure to the energy sector, including significant holdings in U.S., Canadian, and European companies like Exxon Mobil and Shell. Also, much like the other two ETFs above, the IXC also pays a dividend.