U.S. energy stocks are delivering an exceptional performance in 2026, with the S&P 500 Equal Weight Energy ETF (RSPG) reportedly rising 49.2% year to date. The rally reflects strong momentum in the energy sector amid heightened geopolitical uncertainty, particularly surrounding the Iran war, and highlights the importance of energy supply risks to equity-market performance.

Energy ETF Approaches a Historic Annual Performance

According to the figures published by The Kobeissi Letter, RSPG has advanced 49.2% in 2026, putting it on track for its third-strongest annual return since its launch in 2006. The only stronger annual performances shown in the supplied chart were gains of 53.7% in 2021 and 52.2% in 2022. If the current advance holds through year-end, the fund would also record its sixth consecutive annual gain, its longest winning streak since inception.

The ETF uses an equal-weight approach to U.S. energy companies within the S&P 500, giving each constituent approximately the same weight rather than allowing the largest companies to dominate performance. This structure offers a different view of the sector from market-capitalization-weighted energy funds, although individual holdings and periodic rebalancing can influence results. The reported return is based on the supplied source and should not be interpreted as a guaranteed full-year outcome.

Geopolitical Tensions Reinforce Energy Market Focus

The Kobeissi Letter attributes the strength in energy stocks partly to the Iran war. Geopolitical tensions involving major oil-producing regions can increase concerns about supply disruptions, shipping routes and the reliability of global energy flows. When markets anticipate tighter supply, crude prices may rise, potentially supporting revenue expectations for some producers and other energy businesses.

However, the relationship between oil prices and energy equities is not uniform. Producers can benefit from higher realized prices, while refiners, transport companies and energy-intensive businesses may face different cost dynamics. The sector’s performance also depends on production volumes, operating expenses, capital allocation and broader expectations for global energy demand. Geopolitical risk can therefore support energy valuations while simultaneously increasing volatility across the industry.

What Could Sustain or Challenge the Rally?

The supplied chart places the 2026 gain among the strongest annual performances in RSPG’s history. It also shows substantial variation across earlier years, including declines of 48.7% in 2008, 30.4% in 2015 and 35.1% in 2020. These historical swings demonstrate that energy-sector returns can be highly cyclical and sensitive to changes in economic activity, commodity prices and global supply conditions.

The latest two-week advance of 7.5%, cited by The Kobeissi Letter, would imply an even stronger annual return if that pace continued, but short-term performance should not be extrapolated mechanically. A sustained rally would depend on the evolution of geopolitical risks, crude oil prices, company earnings and expectations for global demand. Conversely, easing tensions, increased supply or weaker economic activity could reduce the support currently benefiting energy stocks.

Going forward, investors will be watching developments surrounding Iran, changes in oil supply and inventories, energy-company earnings and the ETF’s ability to maintain its recent gains. For investors in Israel and globally, the energy rally is a reminder that geopolitical developments can have a material influence on sector leadership and inflation expectations. Whether 2026 ultimately becomes one of RSPG’s strongest years will depend on how these forces evolve through the remainder of the year.