What is the largest oil ETF?

The State Street Energy Select Sector SPDR Fund is the largest ETF focused on oil and gas exploration and production. The fund had more than $43.8 billion in assets under management (AUM) in early 2026, consisting of energy stocks listed in the S&P 500 index.

What is a good oil and gas ETF?

A good ETF for those seeking balanced exposure to the U.S. oil and gas sector is the SPDR S&P Oil & Gas Exploration & Production ETF. The fund had roughly equal weighting across 50 oil and gas stocks as of early 2026, distinguishing it from many top oil and gas ETFs that use market-weighting. Their approach results in relatively high concentration in the largest oil and gas stocks, increasing an investor's risk.

Is an oil ETF a good investment?

An oil ETF can be a good investment. They give investors broad exposure to the oil market in a single investment. That helps mitigate the risks of investing in oil stocks that underperformed their peers due to company-specific problems such as mismanagement or excessive debt.

What is the best way to invest in oil?

The best way to invest in oil is through either a large integrated oil company, such as ExxonMobil, or an oil ETF. Either option provides investors with diversified exposure to the entire oil market value chain (production, midstream services, and refining and chemicals). Oil ETFs offer the most diversification since they own many oil stocks, helping to mitigate the risk that an investor is right on their thesis (oil prices will rise) but selects the wrong vehicle (an underperforming oil stock) to express that view.

What are the best crude oil ETFs?

The best crude oil ETFs are the State Street Energy Select SPDR Fund, the Vanguard Energy ETF, the Alerian MLP ETF, the SPDR S&P Oil & Gas Exploration & Production ETF, and the United States Oil Fund LP. Each provides investors with exposure to crude oil either directly (United States Oil Fund) or indirectly through oil stocks. These ETFs should rise with oil prices, and oil-focused ETFs may outperform crude prices.

Do oil ETFs pay dividends?

Yes, most oil ETFs pay dividends. Oil ETFs focused on MLPs, such as the Alerian MLP ETF, offer higher dividend yields (over 7.5% in early 2026).

Best Oil ETFs for 2026 and How to Invest

Take a look at some of the top oil ETFs and consider whether they deserve a spot in your portfolio.

By Matthew DiLallo – Updated Apr 2, 2026 at 4:21 PM EST | Fact-checked by Frank Bass

Key Points

Oil ETFs simplify investing in the oil market, from direct exposure to crude oil to sub-sector-specific investments.
State Street Energy Select SPDR ETF offers exposure to top energy stocks with a low expense ratio.
Alerian MLP ETF targets midstream companies, suitable for investors seeking high-yield dividends.

Oil exchange-traded funds (ETFs) give investors a simple way to gain exposure to the oil market without picking individual stocks or trading futures. Depending on the fund, you can target crude oil prices directly, invest in large energy companies, or focus on specific parts of the oil value chain, such as midstream companies.

Here's everything you need to know about investing in oil ETFs.

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A person looking at an oil pump with the sun setting in the background. — Image source: Getty Images.

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Data source: ETF database. Assets under management as of April 2, 2026. ETF = exchange-traded fund. WTI = West Texas Intermediate.

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2. Vanguard Energy ETF

The Vanguard Energy ETF (VDE -3.02%) is a broad-based fund that provides investors with exposure to companies that produce energy products, including oil, natural gas, and coal. The fund held about 105 energy stocks in early 2026. However, because it also has a market-weight strategy, it is highly concentrated at the top. Its five largest holdings include:

ExxonMobil: 22.6% of the fund's holdings
Chevron: 15.0%
ConocoPhillips: 5.8%
Williams: 3.8%
SLB (SLB +1.80%): 2.9%

The oil ETF also features a low ETF expense ratio of 0.9%. Given its broader focus on energy stocks beyond those in the S&P 500, the ETF provides investors with even more diversification at a low cost, helping reduce risk. It can also deliver a solid performance compared to oil prices during a strong oil market:

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3. Alerian MLP ETF

The Alerian MLP ETF (AMLP -1.04%) is a fund that allows investors to target energy infrastructure midstream master limited partnerships (MLPs). These companies make money by providing midstream services such as operating pipelines or liquefied natural gas (LNG) export facilities.

They tend to generate steadier cash flow than oil and gas producers, making them better oil dividend stocks, as they often pay high yields. In early 2026, the ETF offered a trailing-12-month yield of 7.6%, making it ideal for investors seeking to generate passive income from the oil market. The ETF had 13 holdings in early 2026, led by the following five:

Plains All American Pipeline (PAA -2.32%): 12.3% of the fund's holdings
Energy Transfer (ET -0.05%): 12.3%
Enterprise Products Partners (EPD -1.77%): 12.3%
Sunoco LP (SUN -2.31%): 12.2%
Western Midstream Partners (WES -0.76%): 12%

One drawback of the ETF is its relatively high expense ratio of 1.01%. The fees eat into the income generated by the fund's holdings. However, the cost can be worth it because it lets investors own a basket of income-producing energy companies with a single investment.

It's also worth noting that this fund processes the Schedule K-1s issued by the MLPs and sends Form 1099s to its investors. That reduces the tax complexities of investing in MLPs, which can deter some investors. Because it's a yield-focused vehicle, dividend payments make up a sizable portion of the fund's total returns:

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AMLP total return — Image source: YCharts.

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Silver price chart March 2026 — Image source: YCharts.

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5. United States Oil Fund LP

The United States Oil Fund (USO -7.79%) is an ETN that provides investors with more direct exposure to oil prices. It invests in futures contracts based on WTI prices. This approach allows investors to make a directional bet on oil prices without engaging in futures trading or risking that an oil stock will underperform the price of crude oil.

However, the fund has a rather hefty total expense ratio of 0.7%. The costs of rolling futures contracts can also eat into the fund's returns over the long term, causing it to lag oil prices.

Because of these performance drags, the oil ETF isn't an ideal long-term investment. Instead, it's best for making a short-term wager on crude oil prices since it tends to do a good job of tracking WTI prices over short periods:

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USO vs WTI 2026 — Image source: YCharts.

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Investing in oil ETFs: FAQ

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

TMFmd19

@MatthewDiLallo

Matt DiLallo has positions in Chevron, ConocoPhillips, Energy Transfer, and Enterprise Products Partners. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends ConocoPhillips and Enterprise Products Partners. The Motley Fool has a disclosure policy.

Best Oil ETFs for 2026 and How to Invest

Take a look at some of the top oil ETFs and consider whether they deserve a spot in your portfolio.

Key Points

2. Vanguard Energy ETF

3. Alerian MLP ETF

5. United States Oil Fund LP

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Investing in oil ETFs: FAQ

What is the largest oil ETF?

What is a good oil and gas ETF?

Is an oil ETF a good investment?

What is the best way to invest in oil?

What are the best crude oil ETFs?

Do oil ETFs pay dividends?

How to buy oil ETFs

Benefits and risks of investing in oil ETFs

Should you invest in oil ETFs?

Related investing topics

FAQ

5 top oil ETFs for 2026

2. Vanguard Energy ETF

3. Alerian MLP ETF

4. State Street SPDR S&P Oil & Gas Exploration & Production ETF

5. United States Oil Fund LP

1. State Street Energy Select SPDR ETF