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USO fund tracks oil prices amid Strait of Hormuz crisis, but long-term returns face challenges.

Market News
17 Apr 2026
24/7 Wall Street
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Bullish
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The Strait of Hormuz crisis has sharply reduced oil tanker traffic, pushing spot oil prices near $130 per barrel. The United States Oil Fund (USO) offers investors direct exposure to near-month WTI crude oil futures, benefiting from current supply shocks and backwardation in futures pricing. However, USO's long-term returns are hindered by contango costs when futures curves normalize, and the fund's price is highly sensitive to geopolitical news, making it more suitable for short-to-medium-term tactical trading rather than long-term holding. Investors should also consider tax complexities and volatility risks before investing.

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