10-K: USO Outperforms Benchmark Amid 2025 Crude Oil Price Decline

United States Oil Fund, LP (USO) reported a decrease in its net asset value for 2025, outperforming its benchmark despite a significant drop in crude oil futures prices.

Summary

• USO's per share Net Asset Value (NAV) decreased by 8.42% from $75.45 at the end of 2024 to $69.10 at the end of 2025.
• The Benchmark Oil Futures Contract price decreased by 19.94% during 2025, starting at $71.72 per barrel and ending at $57.42 per barrel.
• USO's actual total return of (8.42)% for 2025 outperformed its benchmark's expected total return of (10.55)% by 2.13%.
• Average daily total net assets decreased from $1,317,318,881 in 2024 to $979,962,153 in 2025.
• Dividend and interest income earned on Treasuries, cash, and cash equivalents decreased from $62,865,288 in 2024 to $38,440,265 in 2025.
• Total expenses for 2025 were $8,456,095, a decrease from $10,798,071 in 2024.
• USO transitioned its investment portfolio to primarily invest in the Benchmark Oil Futures Contract between September 2023 and January 2024.
• USO exceeded NYMEX accountability levels for crude oil futures contracts during 2025, holding a maximum of 16,767 contracts against a 10,000 contract limit for any one month, though no action was taken by NYMEX.
• The transaction fee for Authorized Participants to create or redeem baskets was reduced from $1,000 to $350 per order, effective January 1, 2026.
• The monthly roll period for futures contracts changed from ten days to five days, effective January 1, 2026.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, given USO's outperformance relative to its benchmark despite a significant decline in crude oil prices and overall net asset value. The reduction in expenses and transaction fees are also favorable, though market conditions remain challenging.

Positives

• USO's actual total return of (8.42)% for 2025 outperformed its benchmark's expected total return of (10.55)% by 2.13%.
• Total expenses decreased from $10,798,071 in 2024 to $8,456,095 in 2025, primarily due to a decrease in tax reporting and professional fees.
• The transaction fee for Authorized Participants was reduced from $1,000 to $350 per order, effective January 1, 2026, potentially making share creation/redemption more efficient.
• USO successfully transitioned its investment portfolio back to primarily investing in the Benchmark Oil Futures Contract between September 2023 and January 2024.
• USO maintained effective internal control over financial reporting as of December 31, 2025.
• Interest earned by USO is anticipated to continue to be greater than fees and expenses, potentially leading to outperformance of its benchmark.

Negatives

• USO's per share NAV decreased by 8.42% for the year ended December 31, 2025.
• The Benchmark Oil Futures Contract price decreased by 19.94% during 2025.
• Average daily total net assets decreased significantly from $1,317,318,881 in 2024 to $979,962,153 in 2025.
• Dividend and interest income earned on Treasuries, cash, and cash equivalents decreased from $62,865,288 in 2024 to $38,440,265 in 2025, and the annualized yield based on average daily total net assets decreased from 4.77% to 3.92%.
• USO exceeded NYMEX accountability levels for crude oil futures contracts during 2025, holding a maximum of 16,767 contracts against a 10,000 contract limit for any one month, indicating a potential regulatory risk.
• The crude oil market experienced growing supplies weighing on prices, with supply exceeding demand throughout 2025, widening from 0.6 mbd excess supply at the end of 2024 to 2.8 mbd by the end of 2025.
• Geopolitical tensions, including the Israel-US attack on Iran's nuclear facilities and ongoing conflicts in Ukraine and the Middle East, contributed to price volatility and uncertainty.
• The crude oil futures market experienced states of mild contango during 2025, which can negatively impact total returns when rolling contracts.

Risks

• The NAV of USO's shares relates directly to the value of the Benchmark Oil Futures Contracts and other assets held by USO, and fluctuations in these prices could materially adversely affect an investment.
• Futures contracts have a high degree of price variability and are subject to occasional rapid and substantial changes, potentially leading to the total loss of an investment.
• Natural disasters, public health disruptions (e.g., COVID-19), and international armed conflicts (e.g., Russia-Ukraine war, Middle East conflicts) can negatively impact commodity prices and the value, pricing, and liquidity of USO's investments.
• Past performance of USO or the Benchmark Oil Futures Contract is not necessarily indicative of future results.
• An investment in USO may provide little or no diversification benefits, and investors may suffer losses on USO while incurring losses with respect to other asset classes.
• The market price at which investors buy or sell shares may be significantly less or more than NAV.
• Daily percentage changes in USO's NAV may not closely correlate with daily percentage changes in the price of the Benchmark Oil Futures Contract.
• Daily percentage changes in the price of the Benchmark Oil Futures Contract may not closely correlate with daily percentage changes in the spot price of light, sweet crude oil.
• Natural forces in the oil futures market known as backwardation and contango may increase USO's tracking error and/or negatively impact total return.
• Accountability levels, position limits, and daily price fluctuation limits set by exchanges (e.g., NYMEX, ICE Futures, CFTC's Position Limits Rule) have the potential to cause tracking error by limiting USO's investments.
• Risk mitigation measures imposed by USO's Futures Commission Merchants (FCMs) have the potential to cause tracking error by limiting USO's investments.
• An investor's tax liability may exceed the amount of distributions, if any, on its shares, as USO does not intend to make cash distributions.
• An investor's allocable share of taxable income or loss may differ from its economic income or loss on the shares.
• Items of income, gain, deduction, loss, and credit with respect to shares could be reallocated for U.S. federal income tax purposes if the IRS challenges USO's assumptions, potentially leading to adverse consequences for an investor.
• USO could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares.
• USO is subject to credit risk with respect to counterparties to OTC contracts, including the risk of non-performance.
• Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments.
• The use of swap agreements may expose USO to early termination risk, which could result in significant losses.
• USO could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments.
• Certain of USO's investments could be illiquid, which could cause large losses to investors.
• USO is not actively managed by conventional methods, and its investment objective is to track the Benchmark Oil Futures Contract.
• USO may not meet the listing standards of NYSE Arca, which would adversely impact an investor's ability to sell shares.
• The NYSE Arca may halt trading in USO's shares, which would adversely impact an investor's ability to sell shares.
• The liquidity of USO's shares may be affected by the withdrawal from participation of Authorized Participants.
• Limited partners and shareholders do not participate in the management of USO and do not control USCF, limiting their influence over basic matters.
• Limited partners may have limited liability in certain circumstances, including potentially having liability for the return of wrongful distributions.
• USCF's LLC Agreement provides limited authority to the Non-Management Directors, and any Director of USCF may be removed by USCF's parent company, which is controlled by Nicholas D. Gerber.
• There is a risk that USO will not earn trading gains sufficient to compensate for the fees and expenses that it must pay.
• USO is subject to extensive regulatory reporting and compliance, with potential sanctions for failure to comply.
• Regulatory changes or actions, including the implementation of new legislation, are impossible to predict but may significantly and adversely affect USO.
• USO is not a registered investment company, so shareholders do not have the protections of the 1940 Act.
• Trading in international markets could expose USO to credit and regulatory risk, including adverse exchange-rate movements and political instability.
• USO and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders.
• USO could terminate at any time, causing the liquidation and potential loss of an investor's investment.
• An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on USO's NAV.
• The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause USO's NAV to differ materially from its trading price.
• USO may be subject to interest rate risk, which may prevent it from investing fully at prevailing rates until current investments in Treasuries mature.
• As inflation increases, the present value of USO's assets may decline.
• USO may potentially lose money by investing in government money market funds, as there is no guarantee they will preserve the value of an investment at $1.00 per share.
• The failure or bankruptcy of a clearing broker could result in a substantial loss of USO's assets and impair its ability to execute trades.
• The failure or bankruptcy of USO's Custodian could result in a substantial loss of USO's assets.
• Competing claims of intellectual property rights may adversely affect USO.
• Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks.
• USO's investment returns could be negatively affected by climate change and greenhouse gas restrictions.
• USO and USCF are subjects of class action, derivative, and other litigation, with potential material adverse effects on financial condition.

Future Outlook

USO anticipates that interest rates may continue to stagnate over the near future. It is expected that fees and expenses paid by USO may continue to be lower than interest earned by USO, potentially leading to outperformance of its benchmark. USCF believes that crude oil could have long-term correlation results that indicate prices of crude oil more closely track the movements of equities or bonds. Ongoing global tensions and conflicts remain a flash point for risk to crude oil supply, which could raise prices, while any resolution could ease disruptions and lower prices.

Management Comments

• "USCF believes that market arbitrage opportunities will cause daily changes in USOs share price on the NYSE Arca on a percentage basis to closely track daily changes in USOs per share NAV."
• "USCF further believes that the daily changes in the price of the Benchmark Oil Futures Contract have historically closely tracked the daily changes in spot prices of light, sweet crude oil."
• "USCF believes that the net effect of these relationships will be that the daily changes in the price of USOs shares on the NYSE Arca on a percentage basis will closely track the daily changes in the spot price of a barrel of light, sweet crude oil on a percentage basis, plus interest earned on USOs collateral holdings, less USOs expenses."
• "USCF anticipates that interest rates may continue to stagnate over the near future. It is anticipated that fees and expenses paid by USO may continue to be lower than interest earned by USO. As such, USCF anticipates that USO could possibly outperform its benchmark so long as interest earned is greater than the fees and expenses paid by USO."

Industry Context

StockSavvy.ai notes that the crude oil market in 2025 was characterized by growing supplies exceeding demand, with excess supply widening from 0.6 mbd at the end of 2024 to 2.8 mbd by the end of 2025. This oversupply contributed to the significant decrease in crude oil prices. The industry continues to grapple with geopolitical tensions, such as the Israel-US attack on Iran's nuclear facilities and ongoing conflicts in Ukraine and the Middle East, which introduce volatility and uncertainty to supply dynamics. The shift in OPEC policy, with the unwinding of voluntary cuts and increasing quotas, signals a potential change in the 'OPEC put' that previously supported prices, suggesting a more competitive supply environment. The U.S. has solidified its position as the world's largest crude oil producer, but domestic drillers have shown restraint, indicating that technological and economic factors may outweigh political calls for increased production.

Comparison to Industry Standards

• USO's investment objective is to track the daily percentage changes of the spot price of light, sweet crude oil, as measured by the Benchmark Oil Futures Contract. For the 30-valuation days ended December 31, 2025, the average daily difference between USO's NAV and the Benchmark Oil Futures Contract was 0.011% (1.1 basis points), indicating it met its tracking goal of being within plus/minus 10% of the benchmark's average daily change.
• Historically, crude oil futures markets have experienced periods of contango and backwardation. In 2025, the market experienced mild contango, where the price of the near-month futures contract was lower than the next-month contract. This condition typically causes the value of an investment in the second month to underperform the spot price of crude oil as it approaches expiration.
• For the 1-year period ended December 31, 2025, crude oil showed a positive correlation of 0.747 with unleaded gasoline and 0.763 with heating oil, indicating strong co-movement within the petroleum complex.
• Crude oil's correlation with large cap US equities (S&P 500) was 0.209 for the 1-year period and with US Government Bonds (BEUSG4 Index) was (0.457) for the 1-year period, suggesting a low to negative correlation with traditional asset classes, which can offer diversification benefits.

Management Changes

Corporate Governance

Legal Proceedings

• Optimum Strategies Action: Filed April 6, 2022, against USO and USCF. Claims under Securities Exchange Act of 1934, Rule 10b-5, and Connecticut Uniform Securities Act, challenging statements in registration statements and public statements from Feb-May 2020 regarding market conditions. Court granted USO defendants' motion to dismiss with prejudice on March 15, 2023, for federal claims, and dismissed state law claim without prejudice. No appeal filed.
• Settlement of SEC and CFTC Investigations: On November 8, 2021, USCF and USO resolved investigations with the SEC and CFTC, resulting in cease-and-desist orders and civil monetary penalties totaling $2,500,000 ($1,250,000 to SEC, $1,250,000 to CFTC) for violations related to fraud or deceit upon purchasers and misleading advertising during April-June 2020.
• In re: United States Oil Fund, LP Securities Litigation (Lucas Class Action): Consolidated class action filed June 19, 2020, against USCF, USO, and others. Claims under 1933 Act, Exchange Act, and Rule 10b-5, challenging statements in Feb 25, 2020, and March 23, 2020, registration statements and subsequent public statements through April 2020 regarding market conditions. On September 29, 2025, the Court granted defendants' motion to dismiss the complaint without prejudice and granted plaintiff leave to file an amended complaint. On November 26, 2025, plaintiff filed a motion for leave to file a proposed second consolidated amended complaint, which defendants opposed and is pending.
• Wang Class Action: Filed July 10, 2020, against USO, USCF, and others, asserting federal securities claims under the 1933 Act, challenging disclosures in a March 19, 2020, registration statement. Voluntarily dismissed on August 4, 2020.
• Mehan Action: Derivative action filed August 10, 2020, on behalf of USO against USCF and its directors/officers, alleging breach of fiduciary duties and bad faith related to a March 19, 2020, registration statement and disclosures regarding market conditions. Proceedings stayed pending disposition of motions to dismiss in Lucas Class Action.
• In re United States Oil Fund, LP Derivative Litigation (Cantrell and AML Actions): Consolidated derivative actions filed August 27, 2020, on behalf of USO against USCF and its directors/officers. Allege violations of Exchange Act Sections 10(b), 20(a), 21D, Rule 10b-5, and common law claims related to 2020 market conditions. Proceedings stayed pending final disposition of motions to dismiss in Lucas Class Action.
• RBC Capital Legal Proceedings: Includes settlements for LIBOR class actions ($101M, $3.45M, $1.91M), an SEC settlement for $45M regarding records preservation, a FINRA settlement for $375K fine and $393.8K restitution for inaccurate trade confirmations, and an agreement to dismiss U.K. government bonds litigation (subject to court approval). RBC Bahamas was convicted of complicity in estate tax fraud on March 5, 2024, and appealed.
• Marex Capital Markets, Inc. (MCM) Legal Proceedings: Includes a favorable court ruling for MCM in a private litigation ($1.76M awarded to MCM), a settlement in JAMS Arbitration, dismissal of claims in FINRA Arbitration, settlement in Cook County Litigation, a stayed adversary proceeding, and ongoing discovery in a software/trade secrets litigation.
• Macquarie Bank Limited Legal Proceedings: Ordered by Federal Court of Australia to pay $10M penalty on April 19, 2024, for failing to prevent unauthorized fee transactions. Ordered by ASIC to pay $4.995M penalty on August 26, 2024, for failing to prevent suspicious orders in electricity futures market, with additional license conditions imposed in May 2025.
• Société Générale S.A. Legal Proceedings: Continues to defend civil proceedings related to IBOR matters in the U.S. and Argentina. Settled a foreign exchange class action for $18M. Settled CFTC charges for $1.5M for swap dealer compliance failures. Settled London Gold Market Fixing class action for $50M. Settled CFTC charges for $75M for recordkeeping and supervision failures related to unapproved communication methods.
• The Bank of Nova Scotia Legal Proceedings: Settled CFTC/SEC charges for $15M (CFTC) and $7.5M (SEC) for unapproved communication methods. Settled CFTC charges for $50M for swap dealer compliance failures. Settled CFTC charges for $42M (plus disgorgement/restitution) for spoofing in gold and silver futures, with a parallel DOJ action for $60.4M. Settled CFTC charges for $17M for misrepresentations/omissions related to spoofing.
• ADM Investor Services, Inc. (ADMIS) Legal Proceedings: Ordered by Commodity Exchange Business Conduct Committee Panel to pay $650K fine for reporting inaccuracies and supervision failures. Ordered by CFTC to pay $500K fine for supervision failures. Ordered by Chicago Board of Trade, Commodity Exchange, and Chicago Mercantile Exchange Business Conduct Committees to pay $450K in fines for supervision failures related to account changes and trade transfers.

Related Party Transactions

• USO pays USCF a management fee of 0.45% per annum of average daily total net assets.
• USCF pays the fees of ALPS Distributors (Marketing Agent) and The Bank of New York Mellon (Administrator, Custodian, Transfer Agent).
• USO pays a licensing fee to NYMEX (0.015% on all net assets).
• USO pays its portion of directors and officers liability insurance and fees/expenses of the independent directors of USCF.
• USCF or the Marketing Agent, or an affiliate, may directly or indirectly make cash payments to certain broker-dealers for distribution-related services.
• USCF may make payments from its own resources to financial intermediaries for services in connection with the sale or servicing of USO's shares.
• USCF's principals, officers, directors, or employees may trade futures and related contracts for their own account, potentially creating conflicts of interest with USO's trades.

Stakeholder Impact

• Shareholders: Experienced a decrease in NAV per share and total return in 2025, but benefited from USO's outperformance relative to its benchmark. Subject to complex tax treatment (partnership K-1s) and potential for tax liability to exceed distributions. Exposed to market volatility, correlation risk, and counterparty risks. Benefits from reduced Authorized Participant transaction fees.
• Authorized Participants: The transaction fee for creating or redeeming baskets was reduced from $1,000 to $350 per order, effective January 1, 2026, potentially improving their economics and efficiency in arbitrage activities.
• USCF (General Partner): Continues to manage USO and receives management fees. Faces ongoing litigation and regulatory scrutiny related to past actions, which could divert resources.
• FCMs/Swap Counterparties: Subject to various legal proceedings and regulatory actions, which could impact their ability to serve USO. USO mitigates credit risk by transacting with major global financial institutions and requiring collateral.
• Regulatory Bodies (SEC, CFTC, FINRA, NFA): Continue to oversee USO and its service providers, imposing fines and requiring compliance, ensuring market integrity and investor protection.

Next Steps

• USO will continue to disclose its end-of-day portfolio on its website each business day.
• USO may make available portfolio holdings information to Authorized Participants that reflects its anticipated holdings on the following business day.
• The monthly roll period for futures contracts changed from ten days to five days, effective January 1, 2026.
• The transaction fee for Authorized Participants to create or redeem baskets was reduced from $1,000 to $350 per order, effective January 1, 2026.
• The plaintiff in the Lucas Class Action filed a motion for leave to file a proposed second consolidated amended complaint on November 26, 2025, which defendants have opposed and remains pending.
• All proceedings in the Mehan Action and In re United States Oil Fund, LP Derivative Litigation are stayed pending final disposition of the motion(s) to dismiss in In re: United States Oil Fund, LP Securities Litigation.
• RBC has sought longer term relief from the Department of Labor regarding the QPAM exemption.
• The U.K. government bonds litigation settlement agreement remains subject to court approval.
• The Northern District of Illinois litigation against MCM remains pending, with parties currently exchanging in discovery.

Key Dates

Recommendation

USO demonstrated effective management by outperforming its benchmark in a declining crude oil market in 2025 and reducing expenses. The reduction in Authorized Participant fees is a positive operational adjustment. However, the underlying crude oil market faces persistent oversupply and geopolitical uncertainties, which could continue to pressure prices. While USO's tracking ability is strong, the inherent volatility and contango in the futures market, coupled with ongoing litigation risks for its service providers, suggest a "hold" recommendation for investors seeking exposure to crude oil, acknowledging both the fund's operational strengths and the challenging market environment.

Keywords

United States Oil Fund, USO, Crude Oil Futures, Commodity Pool, SEC Filing, 10-K, Financial Performance, NAV, Benchmark Oil Futures Contract, Contango, Backwardation, Oil Prices, Investment Strategy, Risk Factors, Regulatory Compliance, USCF, Exchange Traded Fund