Bearish Oil ETFs to Watch if China Buys Oil from Iran


The trade war went well off the rails in early August 2019.

President Trump threatened China with another 10% tariff on $800 billion worth of imports. Then China cut off its purchases of U.S. agricultural products, and even allowed its currency to plummet to record lows. All sparked fear of a severe economic slowdown, or even a recession. 

Such news has already done a number on the markets, and most industries, most notably oil.

Oil Could Plummet $30 a Barrel

For one, analysts feared the situation may only grow worse, as businesses and consumers. – crushed under the weight of rising prices – cut back on their energy use.

Two, there were concerns China could retaliate again, and flood the oil market.

For example, Bank of America Merrill Lynch is warning that China could again retaliate by buying large amounts of oil from Iran.  "A Chinese decision to reinitiate Iran crude purchases could send oil prices into a tailspin," Bank of America said, as quoted by CNN.

Should this happen, the analysts warn crude oil prices could sink by as much as $30 a barrel. 

That’s because China could potentially import up to 1.5 million barrels a day from Iran, notes Barron’s – a move that would upend energy markets quickly. 

That would easily flood the oil market, and send price screaming lower.


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On that fear, investors have begun to push into bearish oil ETFs, including:

ProShares UltraShort DJ-UBS Crude Oil ETF (SCO) 

ProShares Ultra Bloomberg Crude Oil seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Bloomberg WTI Crude Oil Subindex. This leveraged ProShares ETF seeks a return that is 2x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next.

DB Crude Oil Double Short ETN (DTO)

DTO seeks to track the price and yield performance, 200% of the inverse daily performance of the Deutsche Bank Liquid Commodity Index Optimum Yield Oil Excess Return. 

ProShares UltraPro 3x Short Crude Oil ETF (OILD)

ProShares UltraPro 3x Short Crude Oil ETF seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the Bloomberg WTI Crude Oil Subindex. 

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