Oil tanker ETF BWET posts 5,100% annual gain, tops US funds

America's top-performing ETF is not found in crypto, AI or technology. Instead, the Breakwave Tanker Shipping ETF (BWET) has climbed 5,100% over the last twelve months.

Following the renewed war in Iran, military clashes in the straits of Hormuz and Bab el-Mandeb, and logistical dangers including this week's attack on Saudi Arabia's crude oil pipeline and a Houthi advance into the Bab el-Mandeb strait, BWET has surged 3,600% since the start of the year.

The ETFs that come closest to BWET's year-to-date performance are well behind, achieving their returns by amplifying single-stock moves: a 2x long Dell ETF up 1,170%, a 2x long Micron ETF up 530%, and a 2x long Marvell ETF up 390%.

No other US-listed ETF comes near BWET's 3,600% return in 2026.

The ETF holds long positions in forward freight agreements, providing exposure to oil tanker charter rates on specific routes such as Hormuz.

Unsurprisingly, oil shipping costs have soared this year because of physical and political threats, greatly benefiting BWET investors. As shipping firms raised their freighting rates, the fund's net asset value (NAV) rose accordingly.

The ETF, once very small, started 2026 with only $2 million in assets. It now holds $200 million in net assets.

Investing in forward freight agreements would have been wise

On February 28, 2026, US and Israeli airstrikes killed Ali Khamenei of the Islamic Revolutionary Guard Corps (IRGC). Hours later, IRGC officials radioed oil tankers to stop transiting the Strait of Hormuz.

As threats stretched from days to weeks and then months, the world's key oil shipping route turned into a bottleneck. Shipping firms demanded higher rates to continue operations.

By March 2, the benchmark Gulf-to-China supertanker rate reached a then-record $423,736 per day, doubling the previous Friday's rate in just two days. In the early days of the conflict, crude rose 10% and Strait of Hormuz traffic fell by four-fifths.

Oil prices have now more than doubled.

On June 17, Trump and Masoud Pezeshkian signed a memorandum intended to reopen Hormuz, but it collapsed within days.

BWET dropped more than 40% in two weeks amid early peace optimism, but recovered all losses by July and then continued rising.

BWET has surged 47% in the past five days

BWET does not hold tankers, oil, or shipping equities. Rather, it comprises a rolling basket of near-dated freight futures, with about 90% linked to the Middle East-to-China supertanker route.

The ETF's aim is to follow futures prices after fees and roll costs. Its sponsor, Amplify, charges a 3.5% expense ratio for managing nearly $200 million in these contracts.

In April, Breakwave founder John Kartsonas said, “There is no risk mitigation.” He also stated, “If rates decline, the fund will also decline.”

So far, oil shipping rates have definitely not fallen.

The Iran conflict has moved inland along oil flows. On Thursday night, social media users shared images of a smoke plume almost 100 km long above Saudi Arabia's East-West oil pipeline, southeast of Medina.

The Houthis reportedly hit the pipeline infrastructure at several locations. NASA thermal data supports those reports, and Reuters confirmed smoke in the images.

BWET rose a further 10% on Friday morning, crossing $700 per share for the first time.

The fund's sponsor page cautions long-term investors, “Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future.”