And while President Trump is determined to reach a deal, officials in Israel say that it’s unlikely that Iran would agree to U.S. demands. 

Sure, the idea of positive talks between Iran and the U.S. sent markets screaming higher yesterday. However, “No negotiations have been held with the US,” Mohammad Bagher Qalibaf, the speaker of Iran’s parliament, said, as quoted by the Associated Press. “And fakenews is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped.”

That’s creating even more uncertainty, with investors unsure of what’s really happening. As we all know, markets hate uncertainty, which is why markets are red again. Adding to that uncertainty, analysts at Citigroup (NYSE: C) believe oil could eventually test $200.

“We posit that the ongoing loss of energy supply to [the] global economy is so large (larger than the shocks of the 1970s as a share of oil supply) that it simply must be solved, either militarily or diplomatically, and that through various potential channels this occurs by mid-late April,” said the firm, as quoted by MarketWatch.com.

The firm expects things to only get worse, with Brent possibly running to at least $120 over the next month. If we see prolonged energy production through June, $200 oil could become a reality. “They come up with that number based on the typical relationship between inventory and price, given the world is now without 13.5 million barrels per day, taking out some 400 million barrels per month, due to Strait of Hormuz disruptions,” added MarketWatch.com.

That would aggressively force oil stocks and ETFs higher until demand destruction sets in.

So, what’s the best way to trade the news?

Investors can always jump into Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), and Occidental Petroleum (NYSE: OXY). However, if you want to diversify at a lower cost, ETFs offer good value.  In fact, here are three energy ETFs pushing higher with oil that we’ve been pounding the table over for months.

SPDR Energy Select Sector ETF (XLE)

With an expense ratio of 0.09%, the Energy Select Sector SPDR Fund (NYSEARCA: XLE) provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Since February 20, the XLE ETF has run from about $54.50 to a high of $59.80.

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) provides exposure to 51 stocks in the 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. Since February 20, the XOP ETF has run from about $150 to $175.

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 (NYSE: EOG). Since February 20, the IXC ETF has run from about $50.60 to $55.90 so far.

Best Energy ETFs to Watch as Oil Prices Rise

With geopolitical tensions showing no sign of easing and oil prices under continued pressure from Strait of Hormuz disruptions, energy ETFs remain one of the most compelling opportunities in the market. XLE, XOP, and IXC have all demonstrated strong momentum since late February, and analysts warn that further price spikes could push these funds even higher.

For investors seeking diversified exposure to rising oil prices without picking individual stocks, energy ETFs offer a cost-effective, flexible solution worth watching closely.

At this point, it all depends on what happens next in the U.S.-Iran war and with the blocked Strait of Hormuz. It’s not ideal to have 20% of the world’s daily oil consumption held in limbo. Making it worse, Middle East countries are cutting oil production. Kuwait announced precautionary cuts to oil production because of “Iranian threats against safe passage of ships through the Strait of Hormuz,” as quoted by CNBC.

Adding to the supply side woes, Iraq’s production has fallen apart. Production from its three main oilfields fell 70% to 1.3 million.  Prior to the war with Iran, those fields were pumping out 4.3 million bpd. This is happening because Iraq is running out of storage space, which ties back to the Strait of Hormuz.

According to Iran, “If you can tolerate the price of oil exceeding $200 per barrel, continue this game,” added Ebrahim Zulfikari, spokesperson for the Hatem al-Anbiya Central Headquarters of the Islamic Revolutionary Guard Corps (IRGC), as quoted by AzerNews.

Some would say that’s just blustery talk from a country that is under attack. However, a defiant Iran just ramped up its strikes, hitting three cargo ships in the Strait of Hormuz. It will be interesting to see what happens next with oil, with the International Energy Agency proposing the largest release of oil reserves in its history to bring down crude prices.

As noted by The Wall Street Journal, “The release of 400 million barrels of oil would more than double the agency’s biggest prior release, when IEA member countries in 2022 put 182 million barrels on the market after Russia launched its full-scale invasion of Ukraine, the officials said. The proposal was circulated at an emergency meeting of energy officials from the IEA’s 32-member countries on Tuesday. Countries are expected to decide on the proposal on March 11. It would be adopted if none object, but even one country’s protests could delay the plan.”

So What’s the Best Way to Trade the News

Investors can always jump into Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), and Occidental Petroleum (NYSE: OXY). However, if you want to diversify at a lower cost, ETFs offer good value.  In fact, here are three energy ETFs pushing higher with oil that we’ve been pounding the table over for months.

SPDR Energy Select Sector ETF (XLE)

With an expense ratio of 0.09%, the SPDR Energy Select Sector ETF (NYSEARCA: XLE) provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Since February 20, the XLE ETF has run from about $54.50 to a high of $55.60 so far.

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) provides exposure to 51 oil and gas companies in the 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. Since February 20, the XOP ETF has run from about $150 to $159.

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, Total SA, and EOG Resources. Since February 20, the IXC ETF has run from about $50.60 to $52 so far.

Energy ETFs Offer a Simple Way to Play the Oil Spike

For investors looking to capitalize on rising oil prices without betting on a single company, energy ETFs provide a straightforward solution. Funds like XLE, XOP, and IXC offer diversified exposure across major oil producers, exploration companies, and global energy giants that tend to benefit when crude prices surge.

If tensions in the Middle East continue and the Strait of Hormuz remains under threat, oil markets could stay volatile with an upward bias. In that environment, broad-based energy ETFs allow investors to participate in the upside while reducing company-specific risk. For traders expecting oil to remain elevated—or even spike to extreme levels—these funds may remain among the most efficient ways to gain exposure to the energy sector.

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.

But don’t let that make you complacent. This is a seismic shift that reverberates far beyond geopolitics and could directly impact global supply and future pricing. That’s because Venezuela holds some of the world’s largest oil reserves, yet its output in 2025 averaged only about 900,000 barrels per day. That’s less than 1% of global consumption.

As markets digest this regime change, investors are eyeing opportunities tied to potential production rebounds, shifting OPEC+ dynamics, and North American refiners. Strategic positioning in the oil market now requires balancing near-term uncertainty with long-term upside potential.

Here are three options for investors looking to profit from changing energy flows, including exposure to U.S. majors like Chevron, oil-focused ETFs, and energy infrastructure plays that could benefit from rising exports.

Chevron: A Direct Venezuela Reentry Play

Chevron Corp. (NYSE: CVX) stands out as the only U.S. oil major still maintaining operations in Venezuela, granting it a first-mover advantage should sanctions ease or production ramp up. CVX has historically managed geopolitical complexity with discipline, balancing shareholder returns with strategic exposure to emerging reserves.

As Venezuelan crude potentially reenters global markets, Chevron could capture significant upside through expanded heavy crude output. Its diversified global portfolio and buyback-driven capital return program also make it a defensive energy giant for investors seeking yield and exposure to upstream strength. The stock’s positioning against Brent and WTI price movements ensures it remains a levered play on global oil prices with less political downside compared to pure Venezuelan assets.

To be clear, this is a long-term proposition that may not show up in Chevron’s balance sheet for many years. However, this could change the narrative around CVX stock, particularly since it pays an attractive dividend that has a 4.36% yield as of January 7.

Energy Select Sector SPDR Fund: A Steady Oil Market Proxy

For those preferring diversified exposure, the Energy Select Sector SPDR Fund (NYSEARCA: XLE) offers a broad and liquid way to play oil price movements. This ETF tracks the largest U.S. energy names, including ExxonMobil (NYSE: XOM), Chevron, and ConocoPhillips (NYSE: COP), providing balanced exposure across upstream, midstream, and downstream segments.

Investors will also get exposure to several of the leading oil services companies. If U.S. oil companies make significant investments in Venezuela, these companies will be essential.

XLE historically outperforms during oil upcycles while delivering steady dividends in slower markets. As volatility returns to the oil market, XLE provides a cost-effective hedge against geopolitical disruption, eliminating single-stock risk. Rising demand, constrained OPEC capacity, and potential normalization of Venezuelan supply could position this ETF for solid total returns through 2026.

Kinder Morgan: Infrastructure Upside From Export Growth

While producers and ETFs offer direct exposure to oil prices, midstream infrastructure companies like Kinder Morgan (KMI) play a quieter but equally lucrative role. If Venezuelan supply returns to global markets, U.S. Gulf Coast ports, pipelines, and storage facilities could see increased activity.

Kinder Morgan, one of North America’s largest oil and gas transporters, stands to benefit from higher export volumes and refinery throughput. Its fee-based revenue model cushions investors from oil price swings, while steady dividend growth provides income stability.

KMI offers a compelling way to profit from expanding trade flows fueled by geopolitical reshuffling in the oil sector. KMI stock also pays a reliable dividend with a compelling yield of 4.35%.

Positioning for a Rebalanced Oil Market

The removal of Venezuela’s long-time leader has reset the energy landscape. Whether through equity exposure in Chevron, diversified ETFs like XLE, or infrastructure plays such as Kinder Morgan, investors have multiple strategies to capture the next phase of the oil market cycle.

Political transition often precedes production opportunity, and positioning early can yield strong returns as energy supply chains rebalance. A mix of upstream, broad-market, and midstream investments offers the best blend of risk management and potential upside in the evolving world of oil investing.