Oil ETF Australia (2026): OOO vs FUEL and How Oil ETFs Work

There are two main ways to invest in oil through the ASX. OOO (BetaShares Crude Oil Index ETF) tracks the price of crude oil futures. FUEL (BetaShares Global Energy Companies ETF) owns the big oil and gas producers. OOO follows the oil price more directly but has lost money over the long run, because of how futures funds work: −6.55% a year since its 2011 launch. FUEL is cheaper and has a far better long-term record, though it's a bet on energy companies rather than on oil itself.

OOO vs FUEL

	OOO	FUEL
What it holds	West Texas Intermediate crude oil futures	The largest global energy companies outside Australia
Fee (p.a.)	1.29%	0.57%
Currency	Hedged to A$	Hedged to A$
Net assets	A$120m	A$290m
Distributions	Annual	Half-yearly
1 year	88.08%	39.89%
3 years p.a.	18.09%	14.34%
5 years p.a.	18.97%	17.89%
10 years p.a.	2.30%	8.01%
Since inception p.a.	−6.55% (Nov 2011)	8.76% (Jun 2016)

Returns after fees to 30 September 2026; net assets at 14 October 2026. Source: BetaShares fund pages linked above. Past performance is not a reliable indicator of future performance.

The past year shows what oil ETFs are for: when the oil price surges, OOO surges further and faster than energy shares. The 10-year and since-launch numbers show what they cost to hold.

Why oil futures ETFs lose money over time

OOO can't store barrels of oil, so it holds futures contracts: agreements to buy oil at a set price on a future date. Its index is the S&P GSCI Crude Oil Index Excess Return, built on WTI crude futures (BetaShares). Each contract expires, so the fund keeps selling the expiring one and buying the next. That "roll" is where the long-term damage comes from:

When later-dated contracts cost more than the expiring one (called contango), the fund sells low and buys high every month. It loses value even if the spot oil price doesn't move.
When later contracts cost less (backwardation), the roll adds to returns. That tends to happen when oil is scarce and prices are rising.

Add a 1.29% fee and currency-hedging costs, and a futures fund can fall well behind the headline oil price over the years. That's why OOO's 10-year return was 2.30% a year, and why it's down overall since 2011 despite large rallies along the way. Futures oil ETFs are built for trading oil-price moves over weeks or months, not for holding for a decade.

FUEL: owning the oil companies instead

FUEL holds the shares of the world's largest energy companies outside Australia, hedged into Australian dollars (BetaShares). There are no futures and no roll. Company profits rise with oil prices, so FUEL still moves with oil, but less violently. Shareholders also receive dividends and benefit from the companies' own growth.

The trade-off is that you're exposed to company-level risks (costs, debt, management, regulation, the energy transition) and to the share market as a whole. In a market sell-off, energy shares can fall even when oil holds steady.

You probably already own some oil

If you hold a broad Australian shares ETF, you already have a slice of energy. Energy was 4.66% of the S&P/ASX 200 at 30 September 2026 (State Street STW factsheet). High-dividend funds hold more: Woodside was 4.7% of Vanguard's VHY at 30 June 2026 (Vanguard). Global ETFs like VGS and BGBL also hold the large international oil producers.

So the real question is whether you want extra oil exposure on top of that, and for how long.

Which oil ETF suits you?

Short-term view on the oil price (weeks to months): OOO tracks oil most directly. Watch it closely, and remember the roll costs that build up the longer you hold.
Longer-term energy exposure: FUEL, at less than half OOO's fee, with dividends and no futures roll.
Diversified investors: you already hold energy through broad ETFs. A small satellite position at most, if any (core and satellite).

Commodity exposure is volatile in both directions. OOO's 88% gain in one year is the same mechanism that can produce losses of that scale. Gold works differently, because physical-gold ETFs hold metal in a vault and have no futures roll (best gold ETFs).

How to buy an oil ETF

Both funds trade on the ASX through any broker using their ticker (OOO or FUEL). Your first purchase on a CHESS-sponsored broker must be at least $500. Compare brokerage in best ETF brokers, and model a position's growth after fees with the ETF calculator. Selling at a profit is a capital gain, taxed at your marginal rate, with a discount if held 12 months or more (CGT on ETFs).

Frequently asked questions

What is the best oil ETF in Australia?

There are two main ASX options. OOO tracks crude oil futures (1.29% a year) and follows the oil price most closely, but has lost 6.55% a year since its 2011 launch because of futures roll costs. FUEL holds global energy companies (0.57% a year) and returned 8.01% a year over ten years to 30 September 2026. OOO suits short-term oil-price views; FUEL suits longer-term energy exposure.

Why has OOO lost money long term when oil prices went up?

OOO holds oil futures and must replace expiring contracts with later ones. When later contracts cost more (contango), each roll loses a little value, regardless of the spot price. Over years, those roll losses plus the 1.29% fee can outweigh oil price gains. That's why futures-based commodity ETFs are better suited to short-term positions.

Can I invest directly in oil in Australia?

Not physically, in practice. Retail investors get oil exposure through futures-based ETFs like OOO, energy company ETFs like FUEL, or by buying ASX energy shares directly. Derivatives such as CFDs and futures are also available but are complex and high-risk.

Is an oil ETF a good long-term investment?

A futures-based oil ETF generally isn't: OOO's return since 2011 is negative despite strong rallies. Energy company ETFs have a better long-term record because companies pay dividends and don't suffer roll costs. Most diversified investors already hold some energy through broad ETFs.

Related calculators and guides

This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.