Key facts
- Energy ETFs are outperforming individual energy stocks due to direct exposure to commodity prices and shipping rates.
- The Breakwave Tanker Shipping ETF (BWET) has returned 4,050% YTD, focusing on crude tanker freight futures.
- The United States Gasoline Fund LP ETF (UGA) has returned 147.9% YTD, tracking U.S. gasoline prices.
- The United States Brent Oil Fund LP ETF (BNO) has returned 121.3% YTD, tracking Brent crude futures.
- The United States Oil Fund LP ETF (USO) has returned 116.4% YTD, tracking WTI crude futures.
- Global supply shocks from the Middle East conflict and elevated oil and gas prices are driving energy sector gains.
Several energy exchange-traded funds have delivered exceptional returns in 2026, significantly outperforming both the broader market and individual energy stocks. This surge is largely due to their direct exposure to volatile commodity prices and shipping rates, amplified by global supply shocks stemming from the expanding Middle East conflict.
The U.S. stock market is on track for a fourth consecutive year of double-digit gains, with the S&P 500 returning 11.8% year-to-date. While most sectors have seen gains, the Energy Sector has been the standout performer, achieving a 37.4% year-to-date return. This contrasts with the underperformance of Utilities, Consumer Discretionary, and Financials. The Information Technology sector followed with a 27.9% gain.
Within the energy sector, oil and gas stocks have surged amid global supply disruptions, while renewable energy stocks have lagged. The State Street Global Advisors Energy Select Sector SPDR Fund (XLE), a fossil fuel benchmark, has returned 39.1% year-to-date, while the iShares Global Clean Energy ETF (ICLN) has only managed a 3.1% gain.
Energy ETFs have outperformed individual equities because many hold underlying futures contracts, shipping derivatives, or niche sub-sectors that directly capture soaring commodity prices. This strategy bypasses the reliance on corporate earnings, refinery margins, and operational costs.
The Breakwave Tanker Shipping ETF (BWET), launched in 2023, focuses on crude tanker freight futures. It holds Forward Freight Agreements (FFAs) and has achieved a remarkable 4,050% year-to-date return. Daily charter rates for Very Large Crude Carriers (VLCCs) jumped significantly after fighting began in late February, with BWET tracking approximately 90% of VLCC routes from the Persian Gulf to China. The fund also benefits from steep backwardation in tanker freight futures, where current capacity costs more than future capacity.
The United States Gasoline Fund LP ETF (UGA) offers direct exposure to U.S. gasoline prices by holding the nearest-month NYMEX gasoline contract. It has returned 147.9% year-to-date, benefiting from disruptions to global fuel supplies and sharply higher gasoline prices. Unlike investments in refiners, UGA directly benefits from rising gasoline futures.
The United States Brent Oil Fund LP ETF (BNO) provides direct exposure to Brent crude futures, returning 121.3% year-to-date. It holds short-dated Brent futures and is directly tied to global crude prices, which have remained above $100 per barrel. Analysts have raised their 2026 Brent forecasts, citing fading expectations for a rapid normalization of shipping through the Strait of Hormuz.
Similarly, the United States Oil Fund LP ETF (USO) tracks WTI crude futures, gaining 116.4% year-to-date. It follows the global rally as lost Gulf supply tightens the market and pulls more U.S. crude toward export markets.