The U.S.-Iran war, now in its ninth month, has reshaped global energy markets this year. Since hostilities began, disruptions to Middle Eastern and Russian refining capacity, attacks on Gulf infrastructure, and the effective closure of the Strait of Hormuz have rendered the largest supply-side shock to oil markets in years. 

The geopolitical panic arising from this conflict pushed Brent crude oil prices up to nearly $110 per barrel during the third quarter of 2026, implying a roughly 33% increase from the prior-year level. 

Undoubtedly, American oil and gas companies have been the primary beneficiaries of this conflict. According to an estimate reported by The New York Times, 51 large U.S. oil and gas firms earned over $130 billion in profits from April through September 2026 — nearly triple the $47 billion earned in the prior-year period.

A separate analysis by Brown University's Climate Solutions Lab found that Americans have spent an extra $150 billion on fuel (over $1,150 per household) since the war with Iran began on Feb. 28.

These windfall gains have therefore made energy exchange-traded funds (ETFs) that hold U.S. oil and gas giants a focal point for investors seeking exposure to the war-driven profit cycle.

Before identifying these funds, investors should examine which companies are benefiting most from the war and how it is driving their profits to assess the potential investment gains.

Companies Reaping the Biggest Gains

The U.S.-Iran war's profit windfall has concentrated most heavily in a handful of U.S. oil and gas giants and refiners, whose latest quarterly results reveal exactly how higher crude prices and blown-out refining margins translated into record profits.

ExxonMobil (XOM Quick QuoteXOM - Free Report) reported third-quarter 2026 profits of $15.4 billion, more than double the $7.5 billion from a year earlier. The war's impact was most evident in its refining business, where margins reached $50.3 per barrel, nearly triple year-ago levels, as roughly 10% of global refining capacity remained offline due to the conflict involving Iran and Ukrainian drone strikes targeting Russian refinery infrastructure.

Chevron (CVX Quick QuoteCVX - Free Report) earned $9.9 billion in profit in the third quarter, versus $3.5 billion last year. Its downstream segment profits hit $4.9 billion — more than four times the prior-year level — as refining margins exploded amid fuel shortages due to the war.

Valero Energy (VLO Quick QuoteVLO - Free Report) reported a more than sixfold surge in third-quarter profit to $6.83 billion, while Phillips 66 (PSX Quick QuotePSX - Free Report) posted a record quarterly profit of $5.62 billion, compared with just $133 million in the year-ago period. These refiners benefited directly from the destruction of competing capacity abroad and the resulting scarcity of diesel and gasoline.

Why ETFs Are the Smarter Bet

While the aforementioned statistics might entice investors to add these oil and gas giants directly to their portfolios, individual stock picking in a war-driven market carries concentration risk. 

ExxonMobil, for instance, currently trades at a trailing EV/EBITDA of 8.49X, above the industry average of 6.43X. With the stock having gained 47.5% year to date, its valuation suggests that much of the war-related earnings windfall may already be reflected in the share price. Anyone buying the stock now pays a higher price for that growth, leaving less margin of safety if a ceasefire pushes crude prices lower.

While ETF investors remain exposed to crude oil price volatility, diversification across multiple companies helps mitigate company-specific risks. As a result, stretched valuations or operational setbacks at an individual refinery are likely to have a smaller impact on the overall portfolio than on a concentrated investment in a single stock.

Energy sector ETFs also provide liquidity and low expense ratios while offering exposure to the upside of the very companies reporting record quarterly results. 

Four ETFs to Bet on Now

For investors seeking to capitalize on the war's profit engine without betting on a single management team or refining margin, ETFs remain the structurally sound vehicle — and the following four are the most direct ways to make that bet.

State Street Energy Select Sector SPDR ETF (XLE Quick QuoteXLE - Free Report)

This fund, with assets under management (AUM) worth $44.08 billion, offers exposure to 21 companies in the oil, gas and consumable fuel, energy equipment and services industries. XOM and CVX hold the first two positions in this fund, carrying 24.32% and 18.46% weight, respectively. PSX and VLO hold the fifth and sixth spots in this fund, carrying 24.32% and 18.46% weight, respectively.

XLE has surged 49.1% year to date and charges 8 basis points (bps) in fees. It traded at a good volume of 30.67 million shares in the last trading session.

First Trust NASDAQ Oil & Gas ETF (FTXN Quick QuoteFTXN - Free Report)

This fund, with net assets worth $1.16 billion, offers exposure to 49 U.S. oil and gas companies. XOM enjoys the first spot in this fund, carrying 8.23% weight, while CVX holds the third position with 8.15% weight. PSX and VLO hold the sixth and seventh spots in this fund, carrying 3.96% and 3.92% weight, respectively.

FTXN has rallied 47.3% year to date and charges 60 bps in fees. It traded at a volume of 0.13 million shares in the last trading session.

State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP Quick QuoteXOP - Free Report)

This fund, with assets under management (AUM) worth $4.25 billion, includes 51 oil and gas exploration and production segment of the S&P TMI, which comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing. XOM enjoys the second position in this fund, carrying a 2.91% weight, while CVX holds the seventh spot with a 2.83% weight. PSX holds the eighth spot in this fund, carrying a 2.81% weight.

XOP has rallied 51.7% year to date and charges 35 bps in fees. It traded at a good volume of 3.22 million shares in the last trading session.

iShares U.S. Oil & Gas Exploration & Production ETF (IEO Quick QuoteIEO - Free Report)

This fund, with net assets worth $886.8 million, offers exposure to 47 U.S. companies engaged in the exploration, production, and distribution of oil and gas. VLO holds the third spot in this fund, carrying an 11.69% weight, while PSX holds the fifth position with a 4.84% weight. 

IEO has surged 60.3% year to date and charges 37 bps in fees. It traded at a volume of 0.19 million shares in the last trading session.