Israel Is Pounding Iran's Energy Infrastructure And It's Sending These Oil ETFs Soaring, But It Maybe Bad News At The Gas Pump

Israel’s attacks on Iran’s energy infrastructure is causing a run-up in global energy prices, with futures markets, and ETFs, all seeing substantial inflows.

What Happened: Attacks on Iran’s Shahran oil depot in Tehran, alongside a natural gas field and multiple oil refineries by Israeli forces over the weekend, are sending global energy prices soaring, with Brent crude oil futures trading at $73.54 a barrel, up 9.1% over the past week.

The attacks that are part of Israel’s ongoing campaign against Iran have been focused on the nation’s energy infrastructure, and not just its military assets. This is aimed at sowing further discontent among the Iranian populace, who are already dealing with blackouts and power cuts due to mismanagement, according to a report by The Telegraph, a U.K.. daily.

Brent crude for August delivery surged more than 7% Friday to settle above $78 a barrel, its largest one-day gain in nearly six months. WTI futures also jumped 6.69% over the past week, before paring gains on Monday as ceasefire rumors circulated.

Energy ETFs such as the ProShares Ultra Bloomberg Crude Oil UCO, the United States Oil Fund LP USO, and the SPDR S&P Oil & Gas Exploration & Production ETF XOP all saw outsized gains over the past week, at 13.61%, 8.90%, and 5.59%, respectively.

ETF	1-Week Performance	YTD Performance
ProShares Ultra Bloomberg Crude Oil UCO	+13.61%	-8.61%
United States Oil Fund LP USO	+8.90%	+2.16%
SPDR S&P Oil & Gas Exploration & Production ETF XOP	+5.59%	-1.28%
Energy Select Sector SPDR Fund XLE	+3.88%	+1.36%

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Why It Matters: On Monday, President Donald Trump asked all U.S. citizens to “immediately” evacuate the city of Tehran, highlighting the seriousness of the crisis, while increasing the likelihood of the United States joining Israel in its war against Iran.

The crisis has since led to a rally in energy ETFs, with the likes of the Energy Select Sector SPDR Fund seeing their biggest inflows since October 2024, at $470 million.

Analysts at ING and JPMorgan have warned that a protracted supply hit could send prices to upwards of $120 a barrel, adding that “Iran is a meaningful oil producer, pumping 3.3 million barrels per day and exporting around 1.7 million.”

According to Benzinga’s Edge Stock Rankings, the United States Oil Fund has a strong momentum, along with a favorable price trend in the short, medium, and long term. Click here for deeper insights.

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