Oil and Gas ETFs Rise on Hormuz Risks and Summer Demand

Escalating geopolitical tensions and shifting seasonal dynamics combined to lift oil and gas markets last week. Yet despite volatile headlines, investors remain notably measured—pricing in risk, but stopping short of panic. 

Middle East Tensions Resurface—But Traders Remain Calm 

As geopolitical risk intensifies in the Middle East, energy markets are once again in the spotlight. Crude oil and natural gas prices moved higher over the last week following the U.S. airstrikes on Iranian nuclear sites, prompting fears that Tehran could retaliate by disrupting traffic through the Strait of Hormuz—the world's most important oil chokepoint. 

Iran’s parliament reportedly voted to approve the strait’s closure, but the final decision lies with the Supreme National Security Council. Analysts widely believe a full blockade remains unlikely. Nonetheless, the risk premium has returned. 

Roughly 20% of the world’s crude oil and LNG passes through Hormuz. Even a partial disruption would ripple across global supply chains, pushing up shipping costs and inflating energy prices from Asia to Europe. 

Strait of Hormuz Threat Keeps Traders on Alert 

Oil futures surged up to 2.7% on Monday after Iran’s parliament approved a motion to close the Strait of Hormuz, through which nearly 20% of global oil and Qatar’s major LNG exports flow. While the final decision rests with Iran’s National Security Council, most experts say an actual blockade remains unlikely. 

Iran would risk alienating key buyers like China, harming its own export revenues, and potentially provoking Western or regional retaliation. Most analysts agree that Tehran is likely aiming to elevate the geopolitical risk premium, rather than trigger a full-scale supply disruption. 

Still, markets responded. Brent crude reached $78.95 per barrel, while WTI hovered around $75.75, reflecting an increased geopolitical premium, which Goldman Sachs currently estimates at $12 per barrel. 

Natural Gas ETFs Lead the Charge 

Natural gas ETFs were last week’s top performers, climbing nearly 8% as markets priced in an impending heatwave across the U.S.—from Chicago to the East Coast—expected this week. The forecasted spike in temperatures is likely to drive up electricity demand for cooling, boosting gas-fired power generation. At the same time, June gas output remains slightly below March’s peak due to maintenance slowdowns, tightening near-term supply. 

Geopolitical concerns and uncertainty around LNG transit through the Strait of Hormuz further supported global gas prices. 

Crude oil ETFs also posted solid gains, rising 3.6% last week, helped by a geopolitical rally on Friday. 

Here’s how some of the leading products performed: 

🔹 Natural Gas ETFs 

WisdomTree European Natural Gas ETC (TTFW): +8.43% WTD 

WisdomTree Natural Gas (NGAS): +7.41% WTD 

🔹 Crude Oil ETFs 

• WisdomTree Bloomberg WTI Crude Oil (WTID): +3.83% WTD 
• WisdomTree WTI Crude Oil ETC (CRUD): +3.67% WTD 
• UBS CMCI Oil SF ETF (OILUSA): +3.29% WTD 

⛽ Natural Gas ETFs

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🛢️ Crude Oil ETFs

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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.