Jasmine Birtles
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How to Invest in Oil in 2026
Ruby Layram
1st Jul 2026
Oil has had a rollercoaster year!
Earlier in 2026, crude prices surged as conflict in the Middle East raised fears of major supply disruptions. More recently, those fears have eased, oil prices have pulled back, and investors are once again debating where the market could head next.
While short-term sentiment has cooled, oil remains one of the world’s most important commodities. It powers global transport, manufacturing and industry, and many of the world’s largest companies continue to generate billions of pounds in profits from producing, refining and transporting it.
Of course, investing in oil isn’t without its ethical considerations. Geopolitical events often influence energy markets, and many investors choose to think carefully about the environmental and social implications before investing in the sector.
That said, oil has been an important part of diversified investment portfolios for decades. Whether you’re looking for dividend income from established energy companies, exposure to rising oil prices through ETFs, or a way to diversify beyond technology stocks, there are several ways to invest in the sector without buying physical barrels of crude.
In this guide, I’ll explain how to invest in oil in 2026, including how to buy oil stocks, oil ETFs and other energy investments. I’ll also cover what’s driving oil prices right now, the opportunities and risks facing the sector, and what every beginner investor should know before adding oil to their portfolio.
Where Could Oil Prices Go Next?
Read: Oil Price Prediction for July 2026
Earlier this year, it seemed as though oil would only move in one direction.
As tensions escalated in the Middle East, fears of supply disruptions sent Brent crude soaring above $120 a barrel. Some analysts even warned that a prolonged closure of the Strait of Hormuz could push prices significantly higher.
That worst-case scenario never materialised.
Since then, geopolitical tensions have eased, exports have resumed and oil prices have retreated into the low-$70s. The market has shifted from worrying about supply shortages to debating whether there could actually be too much oil available during the second half of 2026.
That doesn’t mean oil’s volatility is over.
The market remains incredibly sensitive to geopolitical developments, OPEC+ production decisions and changes in the global economy. Any disruption to supply or stronger-than-expected demand could quickly send prices higher again.
Most analysts now expect oil to trade within a broad range over the coming months rather than continuing the dramatic rally seen earlier this year. While forecasts differ, many investment banks believe Brent crude is likely to remain between $70 and $85 per barrel during the third quarter, unless a major geopolitical event changes the outlook.
Longer term, the investment case for oil is becoming more nuanced.
Global demand remains high, particularly from developing economies, and oil continues to play a vital role in transportation, aviation, manufacturing and petrochemicals. At the same time, the transition towards renewable energy and electric vehicles is expected to gradually slow demand growth over the coming decade.
For investors, this means oil should perhaps be viewed less as a short-term trading opportunity and more as one part of a diversified portfolio. Rather than trying to predict every movement in the price of crude, many investors choose to gain exposure through established energy companies or diversified energy ETFs that can generate returns through dividends as well as commodity prices.
How to Invest in Oil in the UK 2026
Investing in oil doesn’t mean buying up barrels and storing them in your shed! There are 3 main ways to invest in oil as a UK investor.
Here’s an overview of your options.
Invest in Oil ETFs or ETCs
Oil ETFs or ETCs are a type of fund that provides exposure to oil-related companies, without needing to pick individual stocks.
This is one of the most ‘beginner friendly’ options because its simple, low-cost and there are numerous platforms that you can use.
- Choose a trading platform: Sign up to a UK-friendly investment platform like Hargreaves Lansdown, Interactive Investor, or Trading 212.
- Search for oil-focused ETFs or ETCs: For direct exposure to oil prices (like Brent Crude or WTI), look for ETCs such as WisdomTree Brent Crude Oil or WisdomTree WTI Crude Oil. For broader exposure to oil companies, consider ETFs like XLE, VDE, or iShares STOXX 600 Oil & Gas UCITS ETF.
- Review the fund details: Check the fund’s holdings, fees, and performance history. Some use oil futures contracts, so make sure you understand how that works.
- Place an order: Deposit funds into your investment account and fill out the order form. The ETF/ETC will appear in your portfolio within a few minutes.
Buying Shares in Major Oil Companies
Another way to invest in oil in the UK is to buy shares of oil companies. This is a good option if you want exposure to a particular company. However, it requires a lot of research and manual portfolio management.
- Open an investment account: Platforms like Interactive Investor, Trading212, or eToro offer access to UK and international shares.
- Search for oil companies: Popular choices include: Shell (SHEL) and BP (BP). These are UK-based companies with regular dividends.
- Compare company profiles: Look at dividend yields, earnings reports, and how they’re handling the energy transition.
- Buy your shares: Decide how many shares to buy, confirm the trade, and wait for the shares to appear in your portfolio.
Investing in Oilfield Services & Infrastructure
Another way to invest in oil is to invest in the companies that are involved in production and distribution. These companies offer wider exposure to the oil market but, their performance may be affected by factors outside of oil’s supply and demand.
- Sign up to a platform with US stock access: A lot of these companies are listed on the US stock market so you will need a platform that offers US access. Saxo Bank is a good example.
- Look beyond the oil producers: Consider the companies doing the behind-the-scenes work such as leaders in drilling, extraction, and oilfield services.
- Consider midstream infrastructure companies: These handle pipelines, storage, and transport. You can access a basket of these via the Alerian MLP ETF (AMLP).
- Evaluate the company: These firms tend to benefit from rising oil activity without owning the oil itself. However, it’s important to evaluate all metrics that could affect the price before you buy.
- Place your investment: Decide how much to invest and fill out the order form.
For less experienced investors, investing in oil ETFs is probably the ‘easiest’ option. If you’re unsure, it might be worth speaking to an expert before you put any money on the line.
Risks to Keep in Mind Before You Invest
Before you invest in oil, it’s important to understand some of the risks involved.
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Volatility: Prices can surge, but they also crash (remember 2020!)
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Geopolitical madness: Tensions in the Middle East can cut supply or spark investor panic.
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Energy transition: Long-term decarbonisation efforts could weaken oil demand.
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Regulatory risk: New taxes or legislation (e.g. carbon levies) can hit revenues.
Final Thoughts
There are numerous factors that could cause the price of oil to go up in 2025. In particular, tensions in the Middle East could put restrictions on supply, causing the price to spike.
As with any investment, it is important to do your research before you make any decisions. And in this case, consider the ethics of investing before putting any money on the line.
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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. Companies listed above are not necessarily endorsed by Money Magpie. When investing your capital is at risk.
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