Crude oil prices have surged to $112 a barrel, driven by geopolitical tensions around the Strait of Hormuz, a key oil transit route. This has boosted three U.S. oil and gas ETFs—IEO, XOP, and IYE—each up over 29% year-to-date, reflecting different investment strategies. IEO focuses on large upstream producers, offering high sensitivity to oil prices; XOP equally weights smaller exploration and production companies, delivering the highest returns but with more risk; IYE includes integrated majors providing more stable cash flow and dividends. Investors should choose based on their risk tolerance and outlook on the Hormuz crisis and OPEC+ production decisions, as any resolution could quickly reduce the current supply risk premium.
