Crude Oil Investments: The increasing tension in the Middle East has accelerated the heartbeat of the global economy. The direct conflict between Iran and America that started on February 28, 2026 and the threat to the movement of ships in the Strait of Hormuz have set crude oil prices on fire. The fear of rising prices of petrol and diesel not only puts pressure on the pockets of the common man, but amidst this turmoil, many smart investors are also seeing the oil market as a great opportunity. Let us understand how we can earn profit from this rise in crude oil prices.
Why did oil prices suddenly go up?
More than 100 million barrels of crude oil is consumed every day around the world. Our energy, industry and entire transportation system depends on it. However, oil trading in the financial market is many times more than the actual consumption. For example, 1.2 to 2 billion barrels per day of WTI crude futures alone are traded on paper. Due to such huge volumes, even the slightest disturbance in supply or demand can send prices skyrocketing.
Throughout the last year, crude oil prices were hovering in a limited range of $55 to $70 per barrel. On March 12, 2025, its price was $ 67.04 per barrel. But in the beginning of March 2026, there was a sudden big jump. Before the start of the Iran-US conflict, WTI crude was at $66.65, which jumped to beyond $110 per barrel in just a few weeks.
Can investors also invest directly in oil?
Investing in crude oil does not at all mean that you have to buy and hold barrels of oil. For this, ‘Oil ETF’ has emerged as a very easy and transparent means. Ankit Patel, co-founder of Arunasset Investment Services, says that investors can invest money in ETFs like United States Oil Fund (USO) listed in the foreign market. For this you just need a global trading account.
From the tax point of view, some caution has to be taken here. To avail the benefit of Long Term Capital Gain (LTCG), you will have to maintain your investment for at least two years. On premature sale, tax will have to be paid as per your tax slab. Apart from this, if you send more than Rs 10 lakh abroad in a financial year, the bank also deducts 20 percent TCS. If you want to avoid foreign hassles, Indian energy ETFs are a great option. These include shares of domestic companies like ONGC and general Indian equity tax rules are applicable on them.
Stock market and MCX, two different ways of profit
Apart from ETFs, you can also buy shares of global and domestic energy companies that explore, extract and refine oil. According to Piyush Jhunjhunwala, Founder and CEO of Stockify, whenever crude oil prices rise, big companies like ExxonMobil, Chevron and BP get direct benefits. You can take advantage of the oil boom by buying their shares.
At the same time, investors who have a deep understanding of the stock market can directly turn to Multi Commodity Exchange (MCX). Here trading takes place in crude oil futures contracts, where positions are taken by estimating future prices. However, due to the use of margin and leverage, this method is considered suitable only for experienced traders. Ankit Patel clarifies that the profits from MCX are considered as ‘business income’, hence irrespective of the investment period, tax is always applicable as per your slab.
Keep these things in mind before investing money
The crude oil market is as volatile as it is profitable. Before getting into this, it is very important to understand factors like global demand and supply, geopolitical situation, decisions of OPEC countries and currency exchange rates. Piyush Jhunjhunwala advises that investing in the oil sector should always be a long-term strategy and part of a diversified portfolio. Investing all your money in a single asset is always a risky move.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.