10 Best Oil ETFs to Buy in 2025

Ruby Layram 4th Jun 2025 No Comments

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Let’s face it, the oil market can be a right rollercoaster – prices up one minute, down the next, all depending on what OPEC’s had for breakfast. But despite the chaos, oil still powers our homes, cars, planes and global economy. So if you want a slice of the action without the hassle of picking individual companies, oil ETFs might be your ticket.

ETFs (that’s exchange-traded funds, in case you’re new to this) give you a way to invest in the oil market without putting all your eggs in one basket. And because they’re traded like stocks, they’re easy to buy and sell on most platforms.

Below are 10 of the top oil ETFs you can invest in right now, whether you’re looking for broad exposure, price tracking, or juicy dividends.

10 Best Oil ETFs to Watch in 2025

Oil ETF	AUM (Assets Under Management)	Focus
1. Energy Select SPDR Fund (XLE)	$30.9bn	S&P 500 energy giants like ExxonMobil and Chevron
2. Vanguard Energy ETF (VDE)	$9.4bn	Broad energy sector exposure
3. Alerian MLP ETF (AMLP)	$10.4bn	Midstream MLPs – think pipelines and infrastructure
4. SPDR S&P Oil & Gas Exploration & Production ETF (XOP)	$2.0bn	Exploration & production companies
5. United States Oil Fund LP (USO)	$873.8m	Direct exposure to WTI crude prices
6. iShares U.S. Oil & Gas Exploration & Production ETF (IEO)	$850m+	Focused on U.S. oil producers
7. Invesco DWA Energy Momentum ETF (PXI)	$190m	Invests based on momentum in energy stocks
8. ProShares Ultra Bloomberg Crude Oil (UCO)	$1.6bn	Leveraged bet on crude oil prices – very volatile
9. VanEck Oil Services ETF (OIH)	$1.2bn	Companies providing services to oil producers
10. Invesco S&P SmallCap Energy ETF (PSCE)	$400m+	Small-cap oil and gas stocks with high growth potential

Now let’s dig into why oil ETFs are a solid choice – and which ones might suit your investing style.

Why Bother with Oil ETFs?

Investing in oil stocks directly can be like trying to predict the British weather. One minute the sun’s shining (aka prices are booming), the next you’re caught in a downpour of falling profits and political drama.

Oil prices are famously volatile. They bounce up and down with the global economy, supply disruptions, wars, recessions, and even tweets.

On top of that, oil companies are expensive to run. They need to keep drilling, exploring and upgrading infrastructure to stay in the game. And when oil prices fall? That cash flow gets squeezed, hard.

Add to that the tug-of-war between environmental concerns, climate policy, and old-school fossil fuel demand, and it’s a complex puzzle. So it’s no surprise that many investors would rather buy an ETF- a neat bundle of oil stocks or price-tracking contracts – than try to pick the next oil giant themselves.

Here’s What Makes Oil ETFs Appealing:

Diversification: You’re not betting on just one company getting it right.
Simplicity: ETFs are easy to buy and sell on most investment platforms.
Strategy: Whether you want income, growth, or a tactical play on oil prices, there’s likely an ETF to match.
Lower risk: Well, sort of. Oil is still a risky business, but spreading your money across a basket of companies reduces the chance of one dud ruining your returns.

A Closer Look at the Best Oil ETFs to Buy

Let’s take a closer look at the best oil ETFs to buy in 2025.

1. Energy Select SPDR Fund (XLE)

Focus: Large-cap energy stocks in the S&P 500
Top holdings: ExxonMobil, Chevron, ConocoPhillips
Cost: Low expense ratio (0.08%)

This is the granddaddy of oil ETFs – a firm favourite among investors. It’s cheap to hold, packed with oil royalty, and tends to perform well when oil prices climb.

2. Vanguard Energy ETF (VDE)

Focus: Broader range of U.S. energy stocks
Top holdings: Similar to XLE, but includes smaller names too
Cost: Expense ratio of 0.09%

A good all-rounder. Great for long-term investors who want solid exposure to the whole energy sector – not just the mega caps.

3. Alerian MLP ETF (AMLP)

Focus: Midstream MLPs (pipelines, storage, etc.)
Dividend Yield: Over 7.5% (as of early 2025)
Cost: Slightly higher fees at 0.85%

If you’re after income, this one’s for you. These midstream companies pay reliable dividends and don’t get as rattled by oil price swings. Plus, AMLP handles the tax paperwork so you don’t have to.

4. SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

Focus: U.S. oil explorers and producers
Strategy: Equal-weighted – spreads your risk
Cost: 0.35%

Want to back the explorers digging for black gold? This ETF gives you that high-risk, high-reward exposure – but with a safety net through diversification.

5. United States Oil Fund LP (USO)

Focus: Tracks the price of WTI crude oil via futures
Best for: Short-term trading on oil prices
Cost: 0.70% (plus hidden costs from rolling futures)

This one’s not for beginners. It’s volatile, expensive over the long term, and better suited to investors who know how oil futures work. But if you’re making a tactical bet on a price surge, it could deliver.

6. iShares U.S. Oil & Gas Exploration & Production ETF (IEO)

Focus: U.S. oil production companies
Top names: EOG Resources, Pioneer Natural Resources
Cost: 0.39%

More concentrated than VDE or XLE, so you get greater exposure to fast-growing U.S. producers – ideal if you’re optimistic about American shale.

7. Invesco DWA Energy Momentum ETF (PXI)

Focus: Momentum strategy in energy stocks
Approach: Invests in companies with strong price trends
Cost: 0.60%

Momentum investing in energy is risky but can be rewarding. PXI tries to capture trends and ride the wave – perfect if you like technicals over fundamentals.

8. ProShares Ultra Bloomberg Crude Oil (UCO)

Focus: 2x leveraged exposure to crude oil prices
Risk level: EXTREME
Cost: 0.95%

This one is for day traders only. UCO aims to double the daily price movement of crude oil, which means you can win big – or lose even faster.

9. VanEck Oil Services ETF (OIH)

Focus: Oilfield services companies like Schlumberger & Halliburton
Volatility: High – tends to move more than oil itself
Cost: 0.35%

Oilfield services tend to boom when production is expanding. OIH gives you leveraged exposure to drilling and engineering companies riding the oil wave.

10. Invesco S&P SmallCap Energy ETF (PSCE)

Focus: Small-cap U.S. energy stocks
Growth potential: High – but risky
Cost: 0.29%

For the adventurous investor. Small-caps can shoot up quickly when oil prices are on the rise – but they can also tumble just as fast.

Final Thoughts

The oil industry isn’t going away anytime soon, even with the global shift toward clean energy. In fact, the International Energy Agency (IEA) still expects oil demand to rise through 2030.

But picking individual oil stocks is tricky. You’ve got geopolitics, climate pressures, dodgy balance sheets, and management missteps to contend with.

Oil ETFs let you dodge all that drama by giving you broad exposure, steady income, or targeted strategies – depending on your investing goals.

So whether you’re looking for growth, income, or just a clever way to play oil’s next big move, there’s likely an oil ETF out there for you.

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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.

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10 Best Oil ETFs to Buy in 2025

10 Best Oil ETFs to Watch in 2025

Why Bother with Oil ETFs?

Here’s What Makes Oil ETFs Appealing: