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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 129 added, 135 removed, 371 unchanged (42% of the section changed)

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Forward-Looking Information

This annual report on Form 10-K, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding the plans and objectives of management for future operations.

This information may involve known and unknown risks, uncertainties and other factors that may cause USO’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.

USO believes these factors include, but are not limited to, the following:

changes in inflation in the United States, movements in U.S.

and foreign currencies, market volatility in the crude oil markets and futures markets in part attributable to the COVID-19 pandemic in February 2020, the Russia-Ukraine war and conflicts in the Middle East.

Forward-looking statements, which involve assumptions and describe USO’s future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” the negative of these words, other variations on these words or comparable terminology.

These forward-looking statements are based on assumptions that may be incorrect, and USO cannot assure investors that the projections included in these forward-looking statements will come to pass.

USO’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.

This annual report on Form 10-K, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains “forward-looking statements” which generally relate to future events or future performance.

In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology.

All statements (other than statements of historical fact) included in this annual report on Form 10-K that address activities, events or developments that will or may occur in the future, including such matters as changes in inflation in the United States, movements in the stock market, movements in U.S.

and foreign currencies, and market volatility in the commodities markets and futures markets and indexes that track such movements, the Russia-Ukraine war and conflicts in the Middle East, USO’s operations, USCF’s plans and references to USO’s future success and other similar matters, are forward-looking statements.

These statements are only predictions.

Actual events or results may differ materially.

These statements are based upon certain assumptions and analyses USCF has made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances.

Whether or not actual results and developments will conform to USCF’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this annual report on Form 10-K, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments.

Consequently, all the forward-looking statements made in this annual report on Form 10-K are qualified by these cautionary statements, and there can be no assurance that the actual results or developments USCF anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, USO’s operations or the value of its shares.

USO has based the forward-looking statements included in this annual report on Form 10-K on information available to it on the date of this annual report on Form 10-K, and USO assumes no obligation to update any such forward-looking statements.

Although USO undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, investors are advised to consult any additional disclosures that USO may make directly to them or through reports that USO files in the future with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Although USO undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, investors are advised to consult any additional disclosures that USO may make directly to them or through reports that USO files in the future with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

USO, a Delaware limited partnership, is a commodity pool that issues shares that may be purchased and sold on the NYSE Arca.

The investment objective of USO is for the daily changes in percentage terms of its shares’ per share NAV to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the price of the futures contract for light, sweet crude oil traded on the NYMEX that is the near month contract to expire and changes, over a ten-day period, into the NYMEX futures contract that is the next month to expire (the “Benchmark Oil Futures Contract”), plus interest earned on USO’s collateral holdings, less USO’s expenses.

The change from the near month contract to the next month contract occurs at the beginning of each month and will be approximately proportional, relative to total net assets, over each day of the ten-day roll period.

The investment objective of USO is for the daily changes in percentage terms of its shares’ per share NAV to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the price of the futures contract for light, sweet crude oil traded on the NYMEX that is the near month contract to expire and changes, over a five-day period, into the NYMEX futures contract that is the next month to expire (the “Benchmark Oil Futures Contract”), plus interest earned on USO’s collateral holdings, less USO’s expenses.

“Near month contract” means the next contract traded on the NYMEX due to expire.

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The general partner of USO, United States Commodity Funds, LLC (“USCF”), believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Oil Futures Contracts and Other Oil-Related Investments.

USCF believes that market arbitrage opportunities will cause daily changes in USO’s share price on the NYSE Arca on a percentage basis to closely track daily changes in USO’s per share NAV.

In addition, USCF believes that market arbitrage opportunities will cause daily changes in USO’s share price on the NYSE Arca on a percentage basis to closely track daily changes in USO’s 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.

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The calculation is repeated daily.

Prior to the Spring of 2020, USO achieved its investment objective by primarily investing in the Benchmark Oil Futures Contract and Oil Futures Contracts for light, sweet crude oil traded on NYMEX and ICE Futures with the same maturity month as the Benchmark Oil Futures Contract.

In the Spring of 2020, significant market volatility occurred in the crude oil markets and the oil futures markets.

Such volatility was attributable to the COVID-19 pandemic, related supply chain disruptions and disputes among oil-producing countries over the potential limits on the production of crude oil, and a corresponding collapse in demand for crude oil and a lack of on-land storage for crude oil.

Certain circumstances, including the market conditions, regulatory requirements, and risk mitigation measures imposed by its FCMs, resulting from such volatility caused, as discussed below, USO to invest in Oil Futures Contracts other than the Benchmark Oil Futures Contract and to invest in Other Oil-Related Investments, such as swap transactions based on the price of oil.

These conditions severely limited USO’s ability to have a substantial portion of its assets invested in the Benchmark Oil Futures Contract and certain other Oil Futures Contracts of the same month, such as cash-settled, but substantially similar, oil futures contracts traded on ICE Futures (the “ICE WTI Contract”).

Accordingly, USO invested in other permitted Oil Futures Contracts with expirations in later months than the Benchmark Oil Futures Contract.

USO also invested in other permitted investments, including Other Oil-Related Investments, including OTC swaps.

In addition, during the Spring of 2020, USO had to rebalance and adjust the types of holdings in its portfolio more frequently than it had in the past.

Beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO transitioned its investment portfolio and now primarily invests in Benchmark Oil Futures Contracts, consistent with USO’s investment strategy prior to the Spring of 2020.

However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.

USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result or in response to any of the foregoing factors.

In addition, USO may need to hold significant portions of its portfolio in cash beyond what it

has historically held for reasons including (but not limited to) the need to address the changes in market conditions, regulatory requirements or risk mitigation measures or the need to satisfy potential margin requirements.

Following the significant market volatility that occurred in the Spring of 2020 and the market conditions, regulatory requirements and risk mitigation measures taken by USO and USO’s FCM that impacted USO as a result thereof, USO disclosed its parameters for making decisions regarding the permitted investments USO would hold, including the intended order of priority in selecting investments and the type of investments to be held in its portfolio.

Beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO transitioned its investment portfolio to primarily invest in the Benchmark Oil Futures Contract, consistent with USO’s investment strategy prior to the Spring of 2020.

However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions (including but not limited to those allowing USO to obtain greater liquidity (i.e., liquidity requirements) or to execute transactions with more favorable pricing), regulatory requirements (including, but not limited to, exchange accountability levels and position limits imposed by NYMEX as well as statutory or regulatory limits), risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.

USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result of, or in response to, any of the foregoing factors.

In addition, USO may need to hold significant portions of its portfolio in cash beyond what it has historically held for reasons including (but not limited to) the need to address changes in market conditions, regulatory requirements or risk mitigation measures or the need to satisfy potential margin requirements.

Investments in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments could result in wider deviations between the performance of USO’s investments and the Benchmark Oil Futures Contract than if USO’s investments primarily consisted of the Benchmark Oil Futures Contract, and changes in USO’s share price may not be able to track changes in the price of the Benchmark Oil Futures Contract within as narrow a percentage change difference for any period of 30 successive valuation days as it would if USO’s investments primarily consisted of the Benchmark Oil Futures Contract.

Although permitted to do so under its LP Agreement, USO has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly.

Consistent with the foregoing, USO’s investments will take into account the need for USO to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USO becoming leveraged.

Although permitted to do so under its LP Agreement, USO has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and USO makes its investments accordingly.

Consistent with the foregoing, USO’s investments will take into

account the need for USO to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USO becoming leveraged.

If market conditions require it, these risk reduction procedures, including changes to USO’s investments, may occur on short notice.

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These levels and position limits apply to the futures contracts that USO invests in to meet its investment objective.

In addition to accountability levels and position limits, the NYMEX and ICE Futures may also set daily price fluctuation limits on futures contracts.

In addition to accountability levels and position limits, the NYMEX and ICE Futures also set daily price fluctuation limits on futures contracts.

The daily price fluctuation limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price.

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In addition, the ICE Futures maintains the same accountability levels, position limits and monitoring authority for its futures contracts for light, sweet crude oil contract as the NYMEX.

If USO and the Related Public Funds exceed these accountability levels for investments in the futures contracts for light, sweet crude oil, the NYMEX and ICE Futures will monitor such exposure and may ask for further information on their activities including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of USO and the Related Public Funds.

If deemed necessary by the NYMEX and/or ICE Futures, USO could be ordered to reduce its Crude Oil Futures CL contracts to below the 10,000 single month and/or 20,000 all month accountability level.

If USO and the Related Public Funds exceed these accountability levels for investments in the futures contracts for light, sweet crude oil, the NYMEX and ICE Futures will monitor such exposure and may ask for further information on USO’s and the Related Public Funds’ activities including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of USO and the Related Public Funds.

If deemed necessary by the NYMEX and/or ICE Futures, USO could be required to reduce its aggregate position in Crude Oil Futures CL contracts back to the 10,000 single month and/or 20,000 all month accountability level.

As of December 31, 2025, USO held 13,180 NYMEX WTI Crude Oil Futures CL contracts and did not hold any ICE WTI Crude Oil Futures contracts.

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The foregoing accountability levels and position limits are subject to change.

Due to evolving market conditions, remaining within relevant accountability levels and position limits, and, any additional or different risk mitigation measures taken by USO’s FCMs in the future

with respect to USO acquiring additional Oil Futures contracts, USO has invested and intends to invest in other permitted investments, beyond the Benchmark Oil Futures Contract.

Due to evolving market conditions, remaining within relevant accountability levels and position limits, and, any additional or different risk mitigation measures taken by USO’s FCMs in the future with respect to USO acquiring additional Oil Futures contracts, USO has invested and intends to invest in other permitted investments, beyond the Benchmark Oil Futures Contract.

Federal Position Limits

Part 150 of the CFTC’s regulations (the “Position Limits Rule”) establishes federal position limits for 25 core referenced futures contracts (comprised of agricultural, energy and metals futures contracts), futures and options linked to the core referenced futures contracts, and swaps that are economically equivalent to the core referenced futures contracts that all market participants must comply with, with certain exemptions.

The Benchmark Futures Contract is subject to position limits under the Position Limits Rule, and USO’s trading does not qualify for an exemption therefrom.

The Benchmark Oil Futures Contract is subject to position limits under the Position Limits Rule, and

USO’s trading does not qualify for an exemption therefrom.

Accordingly, the Position Limits Rule could inhibit USO’s ability to invest in the Benchmark Oil Futures Contract and thereby could negatively impact the ability of USO to meet its investment objective.

Position limits may potentially cause a tracking error between the price of USO’s shares and the price of the Benchmark Oil Futures Contract.

This may in turn prevent investors from being able to effectively use USO as a way to hedge against crude oil related losses or as a way to indirectly invest in crude oil.

USO has not limited the size of its offering and intends to utilize substantially all of its proceeds to purchase Oil Futures Contracts and Other Oil-Related Investments to the extent possible.

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derivatives laws and regulations if it engages in futures and/or swap transactions with non-U.S.

For example, USO may be impacted by European laws and regulations to the extent that it engages in futures transactions on European exchanges or derivatives transactions with European entities.

For example, USO may be impacted by European laws and regulations to the extent that it

engages in futures transactions on European exchanges or derivatives transactions with European entities.

Other jurisdictions impose requirements applicable to futures and derivatives that are similar to those imposed by the U.S., including position limits, margin, clearing and trade execution requirements.

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exchanges to be offered and sold in the United States.

Infectious disease outbreaks like COVID-19 could negatively affect the valuation and performance of USO’s investments.

Infectious disease outbreaks like the COVID-19 pandemic may arise in the future and could adversely affect USO and, more generally, individual issuers and capital markets, in ways that cannot necessarily be foreseen.

For example, COVID-19 resulted in numerous deaths, travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines and the imposition of both local and more widespread “work from home” measures, cancellations, loss of employment, supply chain disruptions, and lower consumer and institutional demand for goods and services, as well as general concern and uncertainty.

The COVID-19 pandemic that occurred in 2020 had a material adverse impact on local economies in the affected jurisdictions and also on the global economy, as cross border commercial activity and market sentiment were impacted by the outbreak and government and other measures seeking to contain COVID-19’s spread.

COVID-19 also had a material adverse impact on the oil markets and oil futures markets because economic activity and the use of oil were curtailed, which in turn had a significant adverse effect on the prices of Oil Futures Contracts, including the Benchmark Oil Futures Contracts, and Other Oil-Related Investments.

An infectious disease outbreak may arise in the future and could have the same or similar effects as the COVID-19 pandemic, or different effects that cannot be foreseen.

Moreover, as was the case with the COVID-19 pandemic, actions taken by government and quasi-governmental authorities and regulators throughout the world in response to an infectious disease outbreak, including the potential for significant fiscal and monetary policy changes, may affect the value, volatility, pricing and liquidity of some investments or other assets, including those held by or invested in by USO.

Public health crises caused by infectious disease outbreaks may exacerbate other pre-existing political, social and economic risks in certain countries or globally and their duration cannot be determined with certainty.

In a rising rate environment, USO may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.

Natural disasters, public health disruptions (such as the COVID-19 pandemic), and international armed conflicts could impact the price of commodities and/or the value, pricing and liquidity of USO’s investments or assets which, in turn, could cause the loss of your investment in USO.

Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including public health disruptions, pandemics and epidemics (for example, the COVID-19 pandemic), can be highly disruptive to economies and markets.

Such events can, directly or indirectly, negatively impact, and/or cause volatility in, the price of commodities such as crude oil and the value, pricing, and liquidity of the investments or other assets held by USO.

Geopolitical conflict, including war and armed conflicts (such as the Russia-Ukraine war, conflicts in the Middle East, and the expansion of such conflicts in surrounding areas), sanctions, the introduction of or changes in tariffs or trade barriers, global or local recessions, and acts of terrorism, can also, directly or indirectly, negatively impact, and/or cause volatility in, the price of commodities such as crude oil and the value, pricing, and liquidity of the investments or other assets held by USO.

A negative impact on, or volatility in, the price of crude oil or the value, pricing and liquidity of USO’s investments or other assets resulting from the occurrence of any of the aforementioned events, or similar events, could cause you to lose all, or substantially all, of your investment in USO.

USO may be subject to interest rate risk, which may prevent USO from investing fully at prevailing rates until any current investments in Treasuries mature in order to avoid selling those investments at a loss.

Interest rate risk is the risk that fixed income securities and other investments in USO’s portfolio will fluctuate in value because of a change in interest rates.

Interest rate changes can be sudden and unpredictable, and USO may lose money because of movements in interest rates.

When interest rates rise, the value of fixed income securities typically falls.

In a rising interest rate environment, USO may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.

In a rising interest rate environment, USO may not be able to fully invest at prevailing rates until any current investments in Treasuries mature in order to avoid selling those investments at a loss.

Interest rate risk is generally lower for shorter term investments and higher for longer term investments.

The risk to USO of rising interest rates may be greater in the future due to the end of a long period of historically low rates, the effect of potential monetary policy initiatives, including actions taken by the U.S.

Federal Reserve and other foreign equivalents to curb inflation, and resulting market reaction to those initiatives.

In addition, in rising interest rate environments, it is possible that the Treasuries held by USO will decline in value.

When interest rates fall, USO may be required to reinvest the proceeds from the sale, redemption or early prepayment of a Treasury Bill or money market security at a lower interest rate.

As inflation increases, the present value of USO’s assets may decline.

Inflation is a general increase in the overall price level of goods and services in the economy.

The United States Federal Reserve has a stated goal of maintaining a two percent increase in inflation over the long run, as measured by the annual change in the price index for personal consumption expenditures.

Following the COVID-19 pandemic, the United States experienced inflation above the Federal Reserve’s stated two percent goal.

Other world economies similarly experienced elevated inflation rates.

The Federal Reserve increased interest rates and successfully reduced inflation so that it is close to the stated two percent goal.

As a result, in 2024, the Federal Reserve began reducing interest rates.

However, the rate of inflation in the United States is still above the stated two percent goal.

Inflation has the effect of eroding the value of cash or bonds.

In a high inflation environment, the value of USO’s cash and Treasury investments may decline.

USO may potentially lose money by investing in government money market funds.

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USO cannot rely on or expect a government money market fund’s adviser or its affiliates to enter into support agreements or take other actions to maintain the government money market fund’s $1.00 share price.

The credit quality of a government money market fund’s holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the government money market fund’s share price.

The credit quality of a government money market fund’s holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact

on the government money market fund’s share price.

Due to fluctuations in interest rates, the market value of securities held by a government money market fund may vary.

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The price of the Benchmark Oil Futures Contract started the year at $71.72 per barrel.

The high of the year was on April 5, 2024 when the price reached $86.59 per barrel.

The low for the year was on September 10, 2024, which was $64.45 per barrel.

The year ended with the Benchmark Oil Futures Contract at $71.72 per barrel, an increase of approximately 0.10% over the year.

USO’s per share NAV began the year at $66.91 and ended the year at $75.45 on December 31, 2024, an increase of approximately 12.76% over the year.

The high of the year was on January 15, 2025 when the price reached $78.84 per barrel.

The low for the year was on December 16, 2025, which was $55.13 per barrel.

The year ended with the Benchmark Oil Futures Contract at $57.42 per barrel, a decrease of approximately (19.94)% over the year.

USO’s per share NAV began the year at $75.45 and ended the year at $69.10 on December 31, 2025, a decrease of approximately (8.42)% over the year.

The Benchmark Oil Futures Contract prices listed above began with the February 2025 contracts and ended with the February 2026 contracts.

The increase of approximately 0.10% on the Benchmark Oil Futures Contract listed above is a hypothetical return only and could not actually be achieved by an investor holding Oil Futures Contracts.

The decrease of approximately (19.94)% on the Benchmark Oil Futures Contract listed above is a hypothetical return only and could not actually be achieved by an investor holding Oil Futures Contracts.

An investment in Oil Futures Contracts would need to be rolled forward during the time period described in order to simulate such a result.

Furthermore, the change in the nominal price of these differing Oil Futures Contracts, measured from the start of the year to the end of the year, does not represent the actual benchmark results that USO seeks to track, which are more fully described below in the section titled “Tracking USO’s Benchmark.”

During the year ended December 31, 2024, the crude oil futures market experienced states of both contango and backwardation.

During the year ended December 31, 2025, the crude oil futures market experienced states of mild contango.

On days when the market was in contango the price of the near month crude Oil Futures Contract was lower than the price of the next month crude Oil Futures Contract, or contracts further away from expiration.

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Results of Operations.

As of December 31, 2024, USO had issued 14,423,603 shares outstanding.

As of December 31, 2025, USO had 12,823,603 shares outstanding.

On August 29, 2023, the SEC declared effective a registration statement filed by USO that registered an unlimited number of shares.

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1,317,318,881

1,586,716,936

Dividend and interest income earned on Treasuries, cash and/or cash equivalents

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The fee is accrued daily and paid monthly.

The increase in the per share NAV for the year ended December 31, 2024, compared to the year ended December 31, 2023, was due primarily to higher prices for WTI crude oil and the related increase in the value of the Oil Futures Contracts in which USO held and traded.

Average interest rates earned on short-term investments held by USO, including cash, cash equivalents and Treasuries, were higher during the year ended December 31, 2024, compared to the year ended December 31, 2023.

As a result, the amount of income earned by USO as a percentage of average daily total net assets was higher during the year ended December 31, 2024, compared to the year ended December 31, 2023.

To the degree that the aggregate yield was higher, the net expense ratio, inclusive of income, will be lower.

The increase in total fees and other expenses excluding management fees for the year ended December 31, 2024, compared to the year ended December 31, 2023 was due primarily to an increase in tax reporting and professional fees.

The increase in total commissions accrued to brokers for the year ended December 31, 2024, compared to the year ended December 31, 2023, was due primarily to a higher number of Oil Futures Contracts being held and traded.

The decrease in the per share NAV for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due primarily to lower prices for WTI crude oil and the related decrease in the value of the Oil Futures Contracts in which USO held and traded.

Average interest rates earned on short-term investments held by USO, including cash, cash equivalents and Treasuries, were lower during the year ended December 31, 2025, compared to the year ended December 31, 2024.

As a result, the amount of income earned by USO as a percentage of average daily total net assets was lower during the year ended December 31, 2025, compared to the year ended December 31, 2024.

To the degree that the aggregate yield is lower, the net expense ratio, inclusive of income, will be higher.

The decrease in total fees and other expenses excluding management fees for the year ended December 31, 2025, compared to the year ended December 31, 2024 was due primarily to a decrease in tax reporting and professional fees.

The decrease in total commissions accrued to brokers for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due primarily to the number of Oil Futures Contracts being held and traded.

Tracking USO’s Benchmark

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During this time period, USO made no distributions to its shareholders.

The difference between the actual per share NAV total return of USO of 12.76% and the expected total return based on the Benchmark Oil Futures Contract of 6.47% was a difference over the time period of 6.29%, which is to say that USO’s actual total return outperformed its benchmark by that percentage.

However, if USO’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Oil Futures Contract, USO would have had an estimated per share NAV of $67.49 as of December 31, 2025, for a total return over the relevant time period of (10.55)% The difference between the actual per share NAV total return of USO of (8.42)% and the expected total return based on the Benchmark Oil Futures Contract of (10.55)% was a difference over the time period of 2.13%, which is to say that USO’s actual total return outperformed its benchmark by that percentage.

USO incurs expenses primarily composed of the management fee, brokerage commissions for the buying and selling of futures contracts, and other expenses.

The impact of these expenses, offset by interest and dividend income, and net of positive or negative execution, and net the difference in returns between USO’s current holdings and the Benchmark Futures contract tended to cause daily changes in the per share NAV of USO to track slightly lower than daily changes in the price of the Benchmark Oil Futures Contract.

The impact of these expenses, offset by interest and dividend income, and net of positive or negative execution, and net the difference in returns between USO’s current holdings and the Benchmark Oil Futures contract tended to cause daily changes in the per share NAV of USO to track slightly lower than daily changes in the price of the Benchmark Oil Futures Contract.

By comparison, for the year ended December 31, 2024, the actual total return of USO as measured by changes in its per share NAV was 12.76%.

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USO incurs expenses primarily composed of the management fee, brokerage commissions for the buying and selling of futures contracts, and other expenses.

The impact of these expenses, offset by interest and dividend income, and net of positive or negative execution, and net the difference in returns between USO’s current holdings and the Benchmark Futures contract tended to cause daily changes in the per share NAV of USO to track slightly higher than daily changes in the price of the Benchmark Oil Futures Contract.

As a result of market conditions and the regulatory response that occurred in March 2020 and thereafter, large numbers of USO shares that were purchased during a short period of time, and regulatory accountability levels and position limits on oil futures contracts that were imposed on USO, and risk mitigation measures imposed by its FCMs, USO invested in Oil Futures Contracts in months other than the Benchmark Oil Futures Contract.

Beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO began transitioning its investment portfolio so that it primarily invests in Benchmark Oil Futures Contracts, consistent with USO’s investment strategy prior to the Spring of 2020.

However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.

USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result or in response to any of the foregoing factors.

During the fourth quarter of 2024 the rolling 30 day average daily difference between the return of USO’s NAV and the Benchmark Futures Contract was 0.014% (or (1.4) basis points).

However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions (including but not limited to those allowing USO to obtain greater liquidity (i.e., liquidity requirements) or to execute transactions with more favorable pricing), regulatory requirements (including, but not limited to, exchange accountability levels and position limits imposed by NYMEX as well as statutory or regulatory limits), risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.

USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result of, or in response to, any of the foregoing factors.

In addition, USO may need to hold significant portions of its portfolio in cash beyond what it has historically held for reasons including (but not limited to) the need to address the changes in market conditions, regulatory requirements or risk mitigation measures or the need to satisfy potential margin requirements.

During the fourth quarter of 2025 the rolling 30 day average daily difference between the return of USO’s NAV and the Benchmark Oil Futures Contract was (0.01)% or (1.0) basis points).

There are three factors that typically have impacted or are most likely to impact USO’s ability to accurately track Benchmark Oil Futures Contract in addition to the foregoing.

First, USO may buy or sell its holdings in the then current Benchmark Oil Futures Contract at a price other than the settlement price of that contract on the day during which USO executes the trade.

In that case, USO may pay a price that is higher, or lower, than the closing settlement price of the Benchmark Oil Futures Contract, which could cause the changes in the daily per share NAV of USO to either be higher or lower relative to the daily changes in the Benchmark Oil Futures Contract.

In that case, USO may pay a price that is higher or lower, than the closing settlement price of the Benchmark Oil Futures Contract, which could cause the changes in the daily per share NAV of USO to either be

higher or lower relative to the daily changes in the Benchmark Oil Futures Contract.

During the year ended December 31, 2025, USCF attempted to minimize the effect of these transactions by seeking to execute its purchase or sale of Oil Futures Contracts at, or as close as possible to, the end of the day settlement price.

However, it may not always be possible for USO to obtain the settlement price and

there is no assurance that failure to obtain the closing settlement price in the future will not adversely impact USO’s attempt to track the Benchmark Oil Futures Contract.

However, it may not always be possible for USO to obtain the settlement price and there is no assurance that failure to obtain the closing settlement price in the future will not adversely impact USO’s attempt to track the Benchmark Oil Futures Contract.

Second, USO incurs expenses primarily composed of the management fee, brokerage commissions for the buying and selling of futures contracts, and other expenses.

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If the futures market is in backwardation, e.g., when the price of the near month futures contract is higher than the price of the next month futures contract, the investor would buy a next month futures contract for a lower price than the current near month futures contract.

Assuming the price of the next month futures contract was $49 per barrel, or 2% cheaper than the $50 near month futures

contract, then, hypothetically, and assuming no other changes (e.g., to either prevailing crude oil prices or the price relationship between the spot price, the near month contract and the next month contract, and, ignoring the impact of commission costs and the income earned on cash and/or cash equivalents), the value of the $49 next month futures contract would rise to $50 as it approaches expiration.

Assuming the price of the next month futures contract was $49 per barrel, or 2% cheaper than the $50 near month futures contract, then, hypothetically, and assuming no other changes (e.g., to either prevailing crude oil prices or the price relationship between the spot price, the near month contract and the next month contract, and, ignoring the impact of commission costs and the income earned on cash and/or cash equivalents), the value of the $49 next month futures contract would rise to $50 as it approaches expiration.

In this example, the value of an investment in the next month futures contract would tend to outperform the spot price of crude oil.

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Over time, if contango remained constant, this difference between the spot price and the futures contract price would continue to increase.

The chart below compares the daily price of the near month crude oil futures contract to the price of 13 th month crude oil futures contract (i.e., a contract one year forward) over the last 10 years.

The chart below compares the daily price of the near month crude oil futures contract to the price of the 13 th month crude oil futures contract (i.e., a contract one year forward) over the last 10 years.

When the price of the near month futures contract is higher than the price of the 13 th month futures contract, the market would be described as being in backwardation.

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Following the global financial crisis in the fourth quarter of 2008, the crude oil market moved into contango and remained primarily in contango until 2013.

In 2014, global crude oil inventories grew rapidly after OPEC voted to defend its market share against U.S.

In 2014, global crude oil inventories grew rapidly after the Organization of the Petroleum Exporting Countries (“OPEC”) voted to defend its market share against U.S.

shale-oil producers, resulting in another period during which the crude oil market remained primarily in contango.

This period of contango continued through December 31, 2017.

Declining global crude oil inventories caused the market to flip into backwardation at the beginning of 2018 through late October 2018, at which point ongoing supply growth in the U.S., combined with increased OPEC production, once again led market participants to fear another global glut of crude oil.

production, once again led market participants to fear another global glut of crude oil.

The crude oil market was primarily in contango the first half of 2019 and in backwardation during the second half of 2019.

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In March 2020, contango dramatically increased and reached historic levels during the economic crisis arising from the COVID-19 pandemic, related supply chain disruptions and ongoing disputes among oil producing countries.

This level of contango was due to

significant market volatility that occurred in crude oil markets as well as oil futures markets.

This level of contango was due to significant market volatility that occurred in crude oil markets as well as oil futures markets.

Crude oil prices collapsed in the wake of the COVID-19 demand shock, which reduced global petroleum consumption, and the price war launched by Saudi Arabia at the beginning of March 2020 in response to Russia’s unwillingness to participate in extending previously agreed upon supply cuts.

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Holdings in later month contracts will typically cause USO to experience lesser effects from contango and backwardation than would be the case if USO’s holdings were primarily in oil futures contracts in the first month or second month.

However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.

USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result or in response to any of the foregoing factors.

However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions (including but not limited to those allowing USO to obtain greater liquidity (i.e., liquidity requirements) or to execute transactions with more favorable pricing), regulatory requirements (including, but not limited to, exchange accountability levels and position limits imposed by NYMEX as well as statutory or regulatory limits), risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.

USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result of, or in response to, any of the foregoing factors.

Crude Oil Market .

During the year ended December 31, 2025, the price of the front month WTI crude oil futures contract traded in a range between $55.27 to $80.04.

Prices increased 0.10% from December 31, 2023 through December 31, 2024, finishing the year at $71.72.

The early 2020’s witnessed extraordinary events in global financial markets, and crude oil offered no exception.

During the first half of 2020, simultaneous demand and supply shocks led to unparalleled risk and volatility in oil futures markets.

The oil demand shock was caused by the COVID-19 pandemic and the oil supply shock was caused by a Saudi-Russia price war.

These twin shocks, which had never occurred at the same time before, caused several unprecedented effects.

First, the front month WTI Oil Futures Contract traded at negative prices for the first and only time in history.

Crude oil hit an all-time closing low of $(37.63) on April 20, 2020.

Second, annualized volatility of front month WTI crude oil futures prices reached 984% in May 2020 after averaging 25% in the first two months of 2020 and 35% in 2019.

The volatility includes several record-breaking returns that occurred between March and May of 2020.

Third, WTI Oil Futures Contracts, which typically move together (i.e., increase or decrease) about 99% of the time, often moved in opposite directions, with daily correlation dropping to (24%).

Fourth, futures curves, which can exhibit conditions known as “contango” and “backwardation” (as discussed above), moved into an extreme formation that some market experts referred to as “super contango.” This was a result of extreme bearishness in spot prices, which saw the front month WTI Oil Futures Contract detach from the rest of the futures curve and fall to an extreme position relative to later dated futures contracts.

USO, among other market participants, diversified its portfolio away from the front of the futures curve in favor of deferred contract months.

As economies reopened and OPEC+ supply cuts were absorbed by the market, WTI crude oil prices rose from all-time lows and conditions for a new bull market emerged.

Bullish fundamentals for crude oil prices were already in place when Russia invaded Ukraine in February of 2022.

The war led to another round of heightened volatility and higher prices.

Crude oil peaked in May 2022, then declined for the remainder of the year.

Since early 2023, crude oil prices have traded mostly between approximately $65 to $80, with several prominent price reversals.

In the fourth quarter of 2024, U.S.

Prices decreased (19.94)% from December 31, 2024 through December 31, 2025, finishing the year at $57.42.

In 2025, growing supplies weighed on crude oil prices.

Supply exceeded demand throughout the year and the gap between output and consumption widened significantly from 0.6 mbd excess supply at the end of 2024 to 2.8 mbd by the end of 2025.

crude oil production averaged 13.5 mbd.

production has risen since the height of the COVID-19 pandemic in 2020.

OPEC crude production has mostly declined since late 2022 as the cartel has supported prices with voluntary output cuts.

Globally, the U.S.

Energy Information Administration estimates that crude oil supply will slightly exceed demand in 2025 by 0.3 mbd, while the International Energy Agency expects a 0.7 mbd supply surplus.

production rose significantly over the last five years.

OPEC crude production declined from late 2022 through the third quarter of 2024 as the cartel supported prices with overall quotas and voluntary output cuts by certain countries, particularly Saudi Arabia.

OPEC output rose from approximately 27.5 mbd to 29.0 mbd during 2025, but remained below pre- and post-pandemic highs.

The cartel announced plans to begin unwinding voluntary cuts and increasing quotas in 2024 and began to do so after delaying and adjusting these plans several times.

While OPEC steadily increased output several times in 2025, it has also reaffirmed its commitment to maintaining oil market stability and retains the flexibility to change plans as market conditions warrant.

Nevertheless, the long-expected and repeatedly delayed reduction of quotas and voluntary cuts is finally underway.

While not a complete policy reversal, the “OPEC put” which kept a floor on prices over the last several years has likely moved lower.

Russia and OPEC have still not returned to pre-pandemic production levels, while the U.S.

has become the world’s largest crude oil producing nation and other oil producing nations

have also increased their output.

OPEC has fiercely supported prices with voluntary cuts and production quotas over the last several years.

The cartel announced plans to begin unwinding voluntary cuts and increasing quotas in 2024, but delayed and made adjustments to these plans several times.

OPEC may continue to restrict production if conditions warrant.

However, pressure from the Trump administration may tip the scales in favor of those in the cartel who wish to increase production sooner than later.

If OPEC’s strategic focus shifts from price support to market share defense, prices could come under pressure.

Even if OPEC continues to postpone the unwinding of its cuts and voluntary quotas, any sluggishness in the global economy could weigh on prices.

In the U.S., the Trump administration has aggressively called for increased domestic production and its actions have and will make more drilling possible.

has become the world’s largest crude oil producing nation and other oil producing nations have also increased their output.

In the U.S., the Trump administration has aggressively called for increased domestic production, and its actions have and will continue to make more drilling possible.

However, U.S.

drillers have shown restraint in recent years, and it is likely that ongoing growth in U.S.

production will continue along the same trajectory.

Technology, geology, and economics tend to be larger determinants of U.S.

drillers have shown restraint in recent years, and production may not rise as much in the future as it has in the recent past.

Technology, geology, and economics tend to be

larger determinants of U.S.

production levels than political policy.

The current geopolitical situation adds complexity to the supply-demand equation.

While tensions in the Middle East seem to be abating, the region remains a flash point for risk to crude oil supply.

Likewise, the Russia-Ukraine war has the potential to create further supply disruptions and price volatility due to sanctions and disruptions.

Finally, tariffs and other global trade dynamics could curtail the free flow of supply, potentially increasing prices.

Other Trump administration policies have introduced uncertainty into crude oil markets, including on-and-off tariffs and tariff threats.

The overall impact of the administration’s actions could increase the risk of a global economic slowdown or recession, which would reduce demand for crude oil.

Geopolitics continue to add complexity to the supply-demand equation.

Tensions and flare ups supported prices and contributed to price volatility through 2025.

As an example, in June of 2025, Israel and the United States attacked Iran’s nuclear facilities, raising speculation that Iran might attempt to close the Strait of Hormuz.

As approximately 20% of global petroleum consumption transits the Strait daily, this could have had a significant effect on prices.

As it stands, Iran did not close the Strait, and prices fell back to the mid-$65 range after briefly topping $75.

Starting off 2026, the U.S.’s latest posturing against Iran and its actions in Venezuela, as well as ongoing conflicts in Ukraine and the Middle East continue to raise uncertainty about future supply.

Ongoing global tensions, with existing and potential conflicts in various regions, remain a flash point for risk to crude oil supply, which could raise prices.

Conversely, any resolution of geopolitical conflicts could ease supply disruptions, sanctions, and price volatility, which could lower prices.

Crude Oil Price Movements in Comparison to Other Energy Commodities and Investment Categories.

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Crude Oil - 10 Years

Equities (S&P

Bonds (BEUSG4

Equities (FTSE

US Gov’t Bonds

Global Equities

Correlation Matrix 10 Years

Equities (S&P 500)

(BEUSG4 Index)

(FTSE World Index)

Large Cap US Equities (S&P 500)

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Bloomberg, NYMEX

The table below covers a more recent, but much shorter, range of dates than the above table.

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Crude Oil - 1 Year

Equities (S&P

US Gov’t Bonds

Equities (FTSE

Global Equities

Correlation Matrix 1 Year

Equities (S&P 500)

(BEUSG4 Index)

(FTSE World Index)

Large Cap US Equities (S&P 500)

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Bloomberg, NYMEX

Investors are cautioned that the historical price relationships between crude oil and various other energy commodities, as well as other investment asset classes, as measured by correlation may not be reliable predictors of future price movements and correlation results.

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USO has not made, and does not anticipate making, use of borrowings or other lines of credit to meet its obligations.

USO has met, and it is anticipated that USO will continue to meet, its liquidity needs in the normal course of business from the proceeds of the sale of its investments, or from the Treasuries, cash and/or cash equivalents that it intends to hold at all times.

USO has met, and it is anticipated that USO will continue to meet, its liquidity needs in the normal course of business from the proceeds of the sale of its

investments, or from the Treasuries, cash and/or cash equivalents that it intends to hold at all times.

USO’s liquidity needs include:

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During the year ended December 31, 2025, USO did not use other assets to pay expenses.

To the extent income exceeded expenses, USO’s NAV will be positively impacted.

Although permitted to do so under its LP Agreement, USO has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly.

To the extent income exceed expenses, USO’s NAV will be positively impacted.

Although permitted to do so under its LP Agreement, USO has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and USO makes its investments accordingly.

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In particular, unforeseen circumstances, including, but not limited to, (i) market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants) that would lead USO to determine that it could no longer foreseeably meet its investment objective or that USO’s aggregate net assets in relation to its operating expenses or its margin or collateral requirements make the continued operation of USO unreasonable or imprudent, or (ii) adjudication of incompetence, bankruptcy, dissolution, withdrawal, or removal of USCF as the general partner of USO could cause USO, to terminate unless a majority interest of the limited partners within 90 days of the event elects to continue the partnership and appoints a successor general partner, or the affirmative vote of a majority in interest of the limited partners subject to certain conditions.

However, no level

of losses will require USCF to terminate USO.

However, no level of losses will require USCF to terminate USO.

USO’s termination would cause the liquidation and potential loss of an investor’s investment.

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USO may purchase OTC swaps in the future periods, see “Item 3 Quantitative and Qualitative Disclosures About Market Risk” in this annual report on Form 10-K for a discussion of OTC swaps.

As of December 31, 2024, USO held cash deposits and investments in Treasuries and money market funds in the amount of $1,007,709,886 with the custodian and FCMs.

As of December 31, 2025, USO held cash deposits and short - term investments in the amount of $892,556,521 with the custodian and FCMs.

Some or all of these amounts held by a custodian or an FCM, as applicable, may be subject to loss should USO’s custodian or FCMs, as applicable, cease operations.

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Redemption Basket Obligation

In order to meet its investment objective and pay its contractual obligations described below, USO requires liquidity to redeem shares, which redemptions must be in blocks of 100,000 shares called “Redemption Baskets.” USO has to date satisfied this obligation by paying from the cash or cash equivalents it holds or through the sale of its Treasuries in an amount proportionate to the number of shares being redeemed.

paying from the cash or cash equivalents it holds or through the sale of its Treasuries in an amount proportionate to the number of shares being redeemed.

Contractual Obligations

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For a list of USO’s current holdings, please see USO’s website at www.uscfinvestments.com.

The end of day portfolio disclosed on USO’s website would reflect any investments in Futures Contracts beyond the Benchmark Futures Contract, and/or Other Oil-Related Investments, including any made in light of market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors.

The end of day portfolio disclosed on USO’s website would reflect any investments in Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, including any made in light of market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors.

Independent of the USO website, USO may make available portfolio holdings information to Authorized Participants that reflects USO’s anticipated holdings.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis