Oil services ETF outperforms drillers ETF in 2026 amid capex cycle, but long-term returns favor drillers.

The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the VanEck Oil Services ETF (OIH) offer exposure to different parts of the oil sector. XOP invests in oil producers betting on crude prices, while OIH focuses on service companies that benefit from drilling activity. In 2026, OIH has outperformed with a 62.87% return over the past year due to a surge in drilling spending, while XOP returned 18.47%. However, over the last decade, XOP has delivered positive returns (35.63%) while OIH has declined (-20.09%) due to shale era pressures. Investors should choose XOP for direct crude price exposure and OIH if they expect a sustained drilling capex cycle. Current forecasts favor XOP unless Middle East supply disruptions or shale productivity issues force more drilling.