Oil Prices Are Climbing, and That Means This ETF Could Be a Hot Buy This Year

By David Jagielski, CPA – Mar 13, 2026 at 6:00PM ESTKey PointsThe war in Iran has led to a surge in the price of oil recently.Officials in Iran warn that the price could hit $200 per barrel.The XLE ETF holds many top oil and gas stocks that have been doing well this year.Oil prices have been soaring this year as the war in Iran disrupts production. The price of crude oil is around $100 per barrel for the first time since 2022. And depending on how long and severe the disruption proves to be, there's the potential for it to rise even higher. Iranian officials have even warned that the price could reach $200 per barrel, due to the instability in the region. While that would be bad news for the economy and could lead to higher inflation, it would also give oil producers a boost in the process. One exchange-traded fund (ETF) that's been soaring this year is the State Street Energy Select Sector SPDR ETF (XLE +0.33%). It's up around 29% right now, which is a far better performance than the S&P 500, which has fallen by 3% thus far. Here's why adding the ETF to your portfolio could still be a good move today. Image source: Getty Images. The fund is full of top oil and gas stocks The State Street Energy Select Sector SPDR ETF holds energy stocks that are part of the S&P 500 index. It's a subset of the broad index that can enable investors to still invest in safe stocks, but with a focus on energy in particular. It contains just 22 holdings, but they include top oil and gas stocks such as ExxonMobil, Chevron, and ConocoPhillips. Those three account for nearly half of the fund's entire portfolio. There is going to be some risk and volatility with the fund simply due to its exposure to changing commodity prices. But it can be a good way for investors to hedge against the possibility of rising oil prices, while still investing in some quality stocks. ExpandNYSEMKT: XLESelect Sector SPDR Trust - State Street Energy Select Sector SPDR ETFToday's Change(0.33%) $0.19Current Price$57.70Key Data PointsDay's Range$57.10 - $57.9352wk Range$37.24 - $58.22Volume43M It can be a great holding for the long term Although the State Street Energy Select Sector SPDR ETF has already amassed significant gains this year, it has underperformed the market in each of the past three years; it may be overdue for a bounce back. And now, with oil prices rising, it has just the catalyst it needs to take off. But regardless of what happens with oil prices this year, this is still an excellent investment to hold for the long term. With quality stocks, a low expense ratio of 0.08%, and a dividend that yields 2.6%, this is an excellent ETF to hang on to for the long haul. It can provide you with some quality recurring income and help you diversify your portfolio. Read NextMar 11, 2026 •By Keith SpeightsThe Best Oil and Gas ETF to Invest $1,000 in Right NowJul 1, 2022 •By Matt Frankel, CFP3 ETFs That Are Actually Up in the First Half of 2022Jun 4, 2021 •By Dan CaplingerThese 2 Sectors Have Driven 2021's Bull Market RallyOct 16, 2020 •By Dan CaplingerStocks Finish Mixed; Is the Energy Sector Dying?Sep 11, 2020 •By Dan CaplingerThis Could Stop the Stock Market Rotation in Its TracksJul 9, 2020 •By Dan CaplingerStock Market Rally Loses Energy as Dow, S&P Drop on Falling OilAbout the AuthorDavid Jagielski, CPA, has been a contributing Motley Fool stock market analyst covering healthcare, consumer staples, consumer discretionary, and technology stocks since 2017. David has more than 10 years of experience in finance roles across businesses of different sizes and sectors. He holds a Certified Public Accountant designation in Canada.TMFdjagielskiStocks MentionedSelect Sector SPDR Trust - State Street Energy Select Sector SPDR ETFNYSEMKT: XLE$57.70(+0.33%)+$0.19ChevronNYSE: CVX$196.97(0.00%)+$0.00ExxonMobilNYSE: XOM$156.38(+1.86%)+$2.85ConocoPhillipsNYSE: COP$121.89(+1.35%)+$1.63*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.