3 ETFs to Benefit From Oil Price Surge Without Direct Investment

Oil pump jacks at dusk overlaid with a volatile green and red stock price chart graphic.

Key Points

The price of oil is back down compared to earlier in the Iran war, but volatility still remains a dominating factor. Investors keen to reap the benefits of this turbulence but not interested in investing directly in oil futures might turn to oil infrastructure and services ETFs. Funds like PXJ, IEZ, and XES track shares of companies involved in the oil industry without being directly linked to oil itself or to producers. Interested in Invesco Oil & Gas Services ETF? Here are five stocks we like better.

Though near-term pressures from the Iran war appear to be easing, 2026 has been a lesson in just how quickly and dramatically the cost of oil can fluctuate. Crude oil futures that started the year around $60 quickly spiked to more than $112 in early April before pulling back to around $90 as of mid-month. The volatility means some skittish investors will run for safer plays, but it also presents an opportunity for those willing to take on a bit more risk.

Investing in oil can be complicated, though, particularly for those without prior experience and background. One way to control exposure and avoid a direct investment in the commodity is through exchange-traded funds (ETFs), which can be structured to benefit from an increase in the price of oil while taking a lot of the details out of the hands of individual investors. One more step of removal from oil itself may involve funds targeting oil-adjacent stocks, including equipment and infrastructure providers and servicers.

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A 20-Year-Old Fund With Outsized Returns and Dividends

The Invesco Dynamic Oil & Gas Services ETF (NYSEARCA: PXJ) focuses on domestic oil services companies and holds a portfolio of about 30 names in this niche industry. One of the biggest holdings at close to 5.4% of the portfolio—Halliburton Co. (NYSE: HAL)—is likely one of the only companies in the basket that will be known to investors without much experience in this industry. Still, the firms here make it possible for domestic oil producers to function and are essential to the transport and storage of oil products across the country.

PXJ is a fairly early entrant to the ETF space, with more than 20 years of trading history. Still, its unique and targeted focus means it has a small asset base of $121 million and modest one-month average trading volume of around 93,000.

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Its year-to-date (YTD) return of 40% and one-year return of more than 80% demonstrate just how closely tied the share prices of these energy industry companies are to the price of oil itself. A dividend yield of 2.2% provides a nice boost to passive income. With a net expense ratio of 0.63%, however, this fund may be a bit pricey for most investors.

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A Lower-Fee Alternative, But Be Mindful of Weighting

A cheaper alternative to PXJ is the iShares U.S. Oil Equipment & Services ETF (NYSEARCA: IEZ), which has a similar purview but a fee of only 0.38%. Like PXJ, it targets domestic oil equipment and services businesses, and its portfolio is similarly sized at just over 30 stocks.

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One other key distinction between IEZ and PXJ is the weighting of the top holdings in their respective portfolios. PXJ distributes its assets more broadly, while the largest two positions in IEZ's basket—SLB Ltd. (NYSE: SLB) and Baker Hughes Co. (NASDAQ: BKR)—together make up about 45% of its investments.

Emphasizing just two companies like this may be risky, but it has paid off well in terms of performance. IEZ has returned more than 35% YTD and about 70% in the last 12 months. The fund also pays a dividend yield of 1.2%, somewhat behind PXJ but still compelling.

Lower Price Still, With Strong Returns, But a Lagging Dividend Yield

The SPDR S&P Oil & Gas Equipment & Services ETF (NYSEARCA: XES) is cheaper still than IEZ, but by a small margin: XES has an annual fee of just 0.35%. It takes an equal-weight approach for its nearly three dozen holdings, which means that no single position accounts for more than about 4.5% of the invested assets. This puts it more in line with PXJ's approach than IEZ's.

Besides the cost advantage over PXJ, IEZ also has a liquidity boost as well. The fund has nearly half a billion dollars in managed assets and a substantially higher one-month trading volume than PXJ. On top of that, it also has slightly higher returns—almost 40% YTD and 90% in the last year.

Aside from some differences in positions, one other distinction between XES and PXJ is dividend yield. XES has a yield of 1.2%. While this is certainly a good bonus on top of its already-strong returns, it comes in short relative to PXJ's dividend. For this reason, investors seeking more of a passive income stream through their oil infrastructure ETF investment might look to PXJ, while those seeking strong returns and liquidity for a lower overall cost may find XES to be the more attractive option. In any case, though, all three of these funds have solidly outperformed the broader market on both a YTD and a one-year basis.

The article "3 ETFs to Benefit From Oil Price Surge Without Direct Investment" was originally published by MarketBeat.

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