As the U.S.-Iran conflict injects massive volatility into global energy markets, renowned investor Louis Navellier is urging traders to skip popular energy ETFs like United States Oil Fund LP (NYSE:USO) and United States Brent Oil Fund LP (NYSE:BNO)
Instead, Navellier advises that investors should “prefer individual stocks,” specifically recommending refiners like Phillips 66 (NYSE:PSX) to capitalize on the 2026 energy crunch.
Case Against Energy ETFs
Navellier, founder and chief investment officer of Navellier & Associates, is taking a firm stance against broad commodity funds amid surging market volatility. "I do not recommend any energy ETFs and prefer individual stocks," Navellier stated.
Instead of tracking geopolitical risk through exchange-traded funds, Navellier is targeting downstream players that are positioned to capture high margins. He noted, “I do recommend refiners like HF Sinclair Corporation (NYSE:DINO) and PSX due to strong forecasted sales and earnings.”
This sentiment regarding the structural risks of ETFs is echoed by Bitunix Exchange analyst Dean Chen. Chen warned that funds like USO and the BNO carry significant futures rollover risks.
If the U.S.-Iran conflict suddenly de-escalates and supply chains normalize, the futures curve could flip into contango, generating painful “negative roll costs” for long-term ETF holders.
‘Temporary’ War Premium
While geopolitical tensions and naval blockades have pushed crude prices to near-term highs, Navellier does not foresee a sustained, runaway rally driven by the conflict alone.
He expects strong seasonal factors to support prices, projecting WTI crude to remain high—”up to $82 per barrel for WTI”—through Labor Day due to peak worldwide demand.
However, he dismissed the longevity of the war-driven price premium. "The recent uptick in crude oil prices due to the resumption of U.S. attacks on the IRGC is expected to be temporary, since the IRGC is being systematically neutered," Navellier explained.
The 2026 Refining Bottleneck
Navellier’s preference for individual refining stocks like PSX aligns perfectly with a broader structural shift in the energy sector. With approximately 10% of global refining capacity currently offline, active refiners are posting historic profit margins.
As Chen summarized, "In 2026, global oil pricing is no longer determined only by how much crude exists underground, but by the physical limits of alternative trade routes and whether critical energy infrastructure can survive geopolitical conflicts."
For now, experts agree that investing directly in resilient refining infrastructure offers a stronger tactical advantage than betting on crude futures.
Price Action in Crude and Related Instruments
Navellier’s recommendations, PSX and DINO have both advanced in 2026. PSX was up 56.01% year-to-date, 17.05% over the month and 62.79% over the year. Meanwhile, DINO gained 88.45% YTD, 30.43% over the month and 102.57% over the year.
At the last check, Crude Oil WTI Futures were up 1.63% at $80.24, and Brent Oil Futures were up 1.28% at $85.31. Meanwhile, USO closed 1.71% lower on Thursday, and it was up 1.38% in the premarket on Friday. Similarly, BNO closed 1.70% lower at $47.78, and it was 1.22% higher in the premarket on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: MMD Creative on Shutterstock.com
