8-K: Brent Oil Fund Reports 2025 Net Loss, Negative Returns

United States Brent Oil Fund, LP (BNO) reported a net loss of $4.1 million and a negative total return of 6.14% for the year ended December 31, 2025.

Summary

• BNO recorded a net loss of $(4,092,308) for the year ended December 31, 2025, a significant decline from a net income of $10,597,827 in 2024.
• The total return for shareholders was (6.14)% in 2025, compared to a positive 10.04% in 2024.
• Net asset value (NAV) per share decreased to $28.29 at December 31, 2025, from $30.14 at December 31, 2024.
• Total Partners Capital declined to $100,436,504 at year-end 2025 from $114,528,171 at year-end 2024.
• The fund experienced net redemptions of partnership shares, with 3,600,000 shares redeemed for $110,833,721 against 3,350,000 shares added for $100,834,362 in 2025.
• Realized loss on closed commodity futures contracts amounted to $(6,622,950) in 2025, a reversal from a gain of $1,237,760 in 2024.
• Cash and cash equivalents (including equity in trading accounts) decreased to $98,086,646 at December 31, 2025, from $111,818,839 at December 31, 2024.
• Brokerage commissions decreased to $85,818 in 2025 from $113,944 in 2024, attributed to fewer Futures Contracts being held and traded.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a weak performance year for BNO, marked by a net loss, negative total return, and declining assets, reflecting challenging market conditions for its underlying commodity strategy.

Positives

• The Fund maintained effective internal control over financial reporting as of December 31, 2025.
• The independent registered public accounting firm found no critical audit matters in their audit.
• BNO's market value per share ($28.32) was slightly above its net asset value per share ($28.29) at December 31, 2025.
• BNO has diversified its Futures Commission Merchants (FCMs) to include RBC Capital Markets LLC, Marex North America, LLC, Marex Capital Markets Inc., Macquarie Futures USA LLC, and ADM Investor Services, Inc.
• The majority of BNO's assets are held in investments in Treasuries, cash, and/or cash equivalents with its custodian, mitigating the risk of complete loss in the event of an FCM's insolvency.

Negatives

• BNO reported a net loss of $(4,092,308) for 2025, a significant deterioration from the $10,597,827 net income in 2024.
• The total return for the year ended December 31, 2025, was negative (6.14)%, a sharp decline from the 10.04% positive return in 2024.
• Net asset value per share decreased by $1.85 from $30.14 at the end of 2024 to $28.29 at the end of 2025.
• The fund experienced net redemptions of partnership shares in 2025, continuing a trend of capital outflows seen in 2024 and 2023.
• Realized losses on closed commodity futures contracts significantly impacted income, totaling $(6,622,950) in 2025.
• Total cash, cash equivalents, and equity in trading accounts decreased by over $13.7 million during 2025.

Risks

• BNO is exposed to market risk from changes in the market value of its derivative contracts (futures, options, swaps).
• Credit risk exists from the potential failure of counterparties, clearinghouses, FCMs, or the custodian to perform their obligations.
• Futures contracts involve exposure to loss in excess of the amount of variation margin.
• There is a risk of imperfect correlation between movements in the price of futures contracts and the market value of the underlying Brent crude oil spot price.
• The possibility of an illiquid market for a futures contract could hinder BNO's ability to execute transactions.
• Valuing Over-The-Counter (OTC) derivatives is less certain than exchange-traded instruments due to individually negotiated terms and lack of independent pricing.
• Market volatility, driven by global events such as the Russia-Ukraine war, trade disputes, or supply chain disruptions, could affect the value, pricing, and liquidity of BNO's investments.
• Natural market forces like contango and backwardation may impact the total return on an investment in BNO's shares relative to a hypothetical direct investment in Brent crude oil.
• Insolvency of an FCM could result in limited recovery or complete loss of BNO's assets posted with that FCM, although most assets are held with the custodian.
• The failure or insolvency of BNO's custodian could result in a substantial loss of BNO's assets.
• Investments in money market funds carry a risk of loss.
• Cash deposits with the custodian and FCMs are subject to loss if these entities cease operations.
• Theoretically, BNO is exposed to unlimited liability on futures contracts sold short.

Future Outlook

The filing primarily provides historical financial data. It notes that natural market forces, specifically contango and backwardation, are likely to continue impacting the relationship between the market price of BNO's shares and changes in the spot price of Brent crude oil.

Management Comments

• John P. Love, President and Chief Executive Officer of United States Commodity Funds LLC, stated that the 2025 financial statements were mailed to all investors to satisfy annual reporting requirements under federal commodities laws.
• John P. Love affirmed that, to the best of his knowledge and belief, the information contained in the Annual Report for the years ended December 31, 2025, 2024, and 2023 is accurate and complete.

Industry Context

StockSavvy.ai notes that BNO's performance is directly tied to the dynamics of the Brent crude oil futures market. The negative total return and net loss in 2025 suggest a challenging period for Brent crude oil, potentially influenced by market volatility and the effects of contango, where futures prices are higher than the spot price, leading to negative roll yield for long-only futures strategies. The decline in assets and net redemptions indicate a broader trend of investors potentially reducing exposure to commodity ETFs tracking oil during this period.

Comparison to Industry Standards

• StockSavvy.ai notes that BNO's investment objective is to track the daily percentage changes of the Brent crude oil spot price, as measured by a short-term futures contract. The negative total return of (6.14)% in 2025 indicates underperformance relative to a direct, cost-free investment in Brent crude oil if the spot price increased or remained stable, or it reflects a decline in Brent crude oil prices during the year, potentially amplified by contango.
• The fund's expense ratio, including a 0.75% management fee and brokerage commissions (0.09% in 2025), represents a drag on performance compared to a theoretical direct commodity exposure without such costs. This is a standard characteristic of actively managed or futures-based commodity ETFs.
• While specific comparable companies or projects are not detailed in the filing, BNO's performance should be benchmarked against other Brent crude oil ETFs or indices tracking Brent crude oil futures, considering the impact of roll yield and expenses inherent in such structures.

Related Party Transactions

• USCF, as the General Partner, is contractually obligated to receive a management fee equal to 0.75% per annum of BNO's average daily total net assets.
• USCF pays the fees of the Marketing Agent (ALPS Distributors, Inc.), which is 0.025% of BNO's total net assets, and also bears website construction and development costs.
• USCF pays the fees of The Bank of New York Mellon (BNY Mellon) for custodial, administrative, accounting, and transfer agency services.
• BNO shares the fees and expenses of its independent directors and directors and officers liability insurance on a pro rata basis with other Related Public Funds managed by USCF.

Stakeholder Impact

• Shareholders experienced a negative total return of (6.14)% and a decrease in Net Asset Value per share in 2025.
• The General Partner, USCF, received lower management fees in 2025 ($728,855) compared to 2024 ($1,098,840) due to a decrease in average total net assets.
• Service providers such as the Marketing Agent, BNY Mellon, and Futures Commission Merchants continue to receive fees for their services, though brokerage commissions decreased due to reduced trading activity.

Key Dates

Recommendation

The fund experienced a net loss and negative total return in 2025, reversing positive performance from 2024. Declining assets and net redemptions suggest a lack of investor confidence or unfavorable market conditions for its strategy. While internal controls are effective, the financial performance indicates a challenging investment environment for BNO, making it a less attractive holding for investors seeking positive returns.

Keywords

Brent Oil, Crude Oil, Futures Contracts, ETF, Commodity Pool, BNO, USCF, Financial Statements, SEC Filing, Oil Futures, Commodity Exchange Act, NYSE Arca