Oil ETFs Surge Over 6% As Trump Orders Middle East Evacuation Amid Iran Tensions, Warns Region 'Could Be Dangerous'

Crude oil prices and the ETFs that track the commodity are surging higher amid escalating tensions in the Middle East, sending prices to a two-month high.

What Happened: On Wednesday, crude oil prices soared over 4% amid heightened tensions between the United States and Iran, prompting Washington to evacuate non-emergency personnel from its bases and embassies located across the Middle East region.

President Donald Trump announced that U.S. personnel stationed in the Middle East were being moved out, because “it could be a dangerous place.”

Trump further expressed his doubts regarding whether the U.S. and Iran could reach a nuclear deal, saying that “they can’t have a nuclear weapon, very simple.”

Brent crude futures reacted swiftly to the news, rallying 4.81% during the day and ending at $69.81 per barrel. The commodity crossed $70 on Thursday, but has since witnessed a pullback, currently trading at $69.46 per barrel, down 0.46% at the time of writing this.

Why It Matters: News of the evacuation took a toll on the markets, with the Dow Jones Industrial Average dropping nearly 300 points from its earlier peak of 43,115, dipping to 42,860 late in the session.

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The rise in crude oil prices lifted ETFs that track the commodity, such as the United States Oil Fund LP USO, which soared 4.50% on Wednesday, followed by the ProShares Ultra Bloomberg Crude Oil UCO and the SPDR S&P Oil & Gas Exploration & Production ETF XOP, up 6.56% and 1.90%, respectively.

Funds & ETFs	1-Day Returns	Year-To-Date Returns
United States Oil Fund LP	+4.50%	-2.74%
ProShares Ultra Bloomberg Crude Oil	+6.56%	-15.41%
SPDR S&P Oil & Gas Exploration & Production ETF	+1.90%	-4.69%

Crude oil prices are nonetheless expected to remain under pressure, with the Organization of the Petroleum Exporting Countries or OPEC+ unwinding supply despite falling prices.

According to Benzinga’s Edge Rankings, the ProShares Ultra Bloomberg Crude Oil fund fares poorly on Momentum, ranked in the 21st percentile, with a weak price trend in the medium and long term. Click here for deeper insights into the fund, its peers, and competitors.