What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 80 added, 134 removed, 399 unchanged (35% of the section changed)

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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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USCF believes that the net effect of these relationships will be that the daily changes in the price of USO’s 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 USO’s collateral holdings, less USO’s expenses.

The following chart shows, for the period ending September 30, 2025, the rolling 30-day average difference between USO’s NAV and the Benchmark Oil Futures Contract.

The following chart shows, for the period ending March 31, 2026, the rolling 30-day average difference between USO’s NAV and the Benchmark Oil Futures Contract.

This is measured by subtracting the return of the Benchmark Oil Futures Contract from the return on USO’s NAV for each of the last thirty business days, and then averaging those thirty differences.

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*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

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.

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.

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.

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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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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 September 30, 2025, USO held 11,962 NYMEX WTI Crude Oil Futures CL contracts and did not hold any ICE WTI Crude Oil Futures contracts.

USO exceeded accountability levels of the NYMEX during the nine months ended September 30, 2025, including when it held a maximum of 16,232 Crude Oil Futures CL contracts on the NYMEX, exceeding the “any” month limit.

As of March 31, 2026, USO held 23,766 NYMEX WTI Crude Oil Futures CL contracts and did not hold any ICE WTI Crude Oil Futures contracts.

USO exceeded accountability levels of the NYMEX during the three months ended March 31, 2026, including when it held a maximum of 26,969 Crude Oil Futures CL contracts on the NYMEX, exceeding the “any one” month limit.

No action was taken by the NYMEX and USO did not have to reduce the number of positions held.

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Investors should note that the foregoing accountability levels and position limits are subject to change, which in turn could change the amount and type of permitted investments in which USO invests.

For the nine months ended September 30, 2025, USO did not exceed any position limits imposed by the NYMEX and ICE Futures.

For the three months ended March 31, 2026, USO did not exceed any position limits imposed by the NYMEX and ICE Futures.

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

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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.

All of these 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.

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The Margin Rules require Swap Entities to exchange variation margin with all of their counterparties who are financial end-users.

The minimum variation margin amount is the daily mark-to-market change in the value of the swap, taking into account the

amount of variation margin previously posted or collected.

The minimum variation margin amount is the daily mark-to-market change in the value of the swap, taking into account the amount of variation margin previously posted or collected.

Swap Entities are required to exchange initial margin with their financial end-users who have “material swaps exposure” (i.e., an average daily aggregate notional of $8 billion or more in non-cleared swaps calculated in accordance with the Margin Rules).

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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.

Geopolitical conflict, including war and armed conflicts (such as the Russia-Ukraine war, military 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.

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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.

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Price Movements

Crude oil futures prices were volatile during the nine months ended September 30, 2025.

Crude oil futures prices were volatile during the three months ended March 31, 2026.

The price of the Benchmark Oil Futures Contract started the period at $57.42 per barrel.

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

The low of the period was on May 5, 2025 when the price dropped to $57.05 per barrel.

The period ended with the Benchmark Oil Futures Contract at $62.37 per barrel, a decrease of approximately (13.04)% over the period.

USO’s per share NAV began the period at $75.45 and ended the period at $73.58 on September 30, 2025, a decrease of approximately (2.48)% over the period.

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

The decrease of approximately (13.04)% on the Benchmark Oil Futures Contract listed above is a hypothetical return only and would not actually be realized by an investor holding Oil Futures Contracts.

The high of the period was on March 30, 2026 when the price reached $102.88 per barrel.

The low of the period was on January 7, 2026 when the price dropped to $55.94 per barrel.

The period ended with the Benchmark Oil Futures Contract at $101.38 per barrel, an increase of approximately 76.56% over the period.

USO’s per share NAV began the period at $69.10 and ended the period at $126.39 on March 31, 2026, an increase of approximately 82.91% over the period.

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

The increase of approximately 76.56% 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 nine months ended September 30, 2025, the crude oil futures market experienced states of mild contango.

During the three months ended March 31, 2026, the crude oil futures market was in a state of backwardation.

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 September 30, 2025, USO had 12,023,603 shares outstanding.

As of March 31, 2026, USO had 20,923,603 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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The accompanying unaudited financial statements have been adjusted to reflect the effect of the reverse share split on a retroactive basis.

As of September 30, 2025, USO had the following Authorized Participants:

As of March 31, 2026, USO had the following Authorized Participants:

ABN AMRO Clearing USA LLC, BNP Paribas Securities Corp., Citadel Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Company, Jane Street Capital LLC, JP Morgan Securities LLC, Merrill Lynch Professional Clearing Corp., Morgan Stanley & Company Inc., RBC Capital Markets LLC, SG Americas Securities LLC, UBS Securities LLC and Virtu Americas LLC.

For the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

September 30, 2025

September 30, 2024

For the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

March 31, 2026

March 31, 2025

Average daily total net assets

1,434,478,067

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

Annualized yield based on average daily total net assets

Management fee

Total fees and other expenses excluding management fees

Total commissions accrued to brokers

Total commissions as annualized percentage of average total net assets

Portfolio Expenses .

USO’s expenses consist of investment management fees, brokerage fees and commissions, certain offering costs, licensing fees, registration fees, the fees and expenses of the independent directors of USCF and expenses relating to tax accounting and reporting requirements.

The management fee that USO pays to USCF is calculated as a percentage of the total net assets of USO.

The fee is accrued daily and paid monthly.

Average interest rates earned on short-term investments held by USO, including cash, cash equivalents and Treasuries, were lower during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

As a result, the amount of income earned by USO as a percentage of average daily total net assets was lower during the nine months ended September 30, 2025, compared to the nine months ended September 30, 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 nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due primarily to a decrease in tax reporting and professional fees.

The increase in total commissions accrued to brokers for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due primarily to a higher number of Oil Futures Contracts being held and traded.

For the Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

September 30, 2025

September 30, 2024

Average daily total net assets

1,015,724,718

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The fee is accrued daily and paid monthly.

Average interest rates earned on short-term investments held by USO, including cash, cash equivalents and Treasuries, were lower during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

As a result, the amount of income earned by USO as a percentage of average daily total net assets was lower during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Average interest rates earned on short-term investments held by USO, including cash, cash equivalents and Treasuries, were lower during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

As a result, the amount of income earned by USO as a percentage of average daily total net assets was lower during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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 three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due primarily to a decrease in tax reporting and professional fees.

The decrease in total commissions accrued to brokers for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due primarily to a lower number of Oil Futures Contracts being held and traded.

The increase in total fees and other expenses excluding management fees for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due primarily to an increase in commissions expense.

The increase in total commissions accrued to brokers for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due primarily to a higher number of Oil Futures Contracts being held and traded.

Tracking USO’s Benchmark

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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.

For the 30-valuation days ended September 30, 2025, the average daily change in the Benchmark Oil Futures Contract was 0.015%, while the average daily change in the per share NAV of USO over the same time period was 0.027%.

For the 30-valuation days ended March 31, 2026, the average daily change in the Benchmark Oil Futures Contract was 1.822%, while the average daily change in the per share NAV of USO over the same time period was 1.832%.

The average daily difference was 0.010%% (or 1.0 basis points, where 1 basis point equals 1/100 of 1%), meaning that over this time period USO’s NAV performed within the plus or minus 10% range established as its benchmark tracking goal.

Since the commencement of the offering of USO’s shares to the public on April 10, 2006 to September 30, 2025, the average daily change in the Benchmark Oil Futures Contract was 0.002%, while the average daily change in the per share NAV of USO over the same time period was (0.009)%.

Since the commencement of the offering of USO’s shares to the public on April 10, 2006 to March 31, 2026, the average daily change in the Benchmark Oil Futures Contract was 0.014%, while the average daily change in the per share NAV of USO over the same time period was 0.003%.

The average daily difference was 0.011% (or 1.1 basis points, where 1 basis point equals 1/100 of 1%), meaning that over this time period USO’s NAV performed within the plus or minus 10% range established as its benchmark tracking goal.

The following two charts demonstrate the correlation between the changes in USO’s NAV and the changes in the Benchmark Oil Futures Contract.

The first chart below shows the daily movement of USO’s per share NAV versus the daily movement of the Benchmark Oil Futures Contract for the 30 valuation day period ended September 30, 2025.

The second chart below shows the monthly total returns of USO as compared to the monthly value of the Benchmark Oil Futures Contract for the five years ended September 30, 2025.

The first chart below shows the daily movement of USO’s per share NAV versus the daily movement of the Benchmark Oil Futures Contract for the 30 valuation day period ended March 31, 2026.

The second chart below shows the monthly total returns of USO as compared to the monthly value of the Benchmark Oil Futures Contract for the five years ended March 31, 2026.

*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

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An alternative tracking measurement of the return performance of USO versus the return of its Benchmark Oil Futures Contract can be calculated by comparing the actual return of USO, measured by changes in its per share NAV, versus the expected changes in its per share NAV under the assumption that USO’s returns had been exactly the same as the daily changes in its Benchmark Oil Futures Contract.

For the nine months ended September 30, 2025, the actual total return of USO as measured by changes in its per share NAV was (2.48)%.

This is based on an initial per share NAV of $75.45 as of December 31, 2024 and an ending per share NAV as of September 30, 2025 of $73.58.

For the three months ended March 31, 2026, the actual total return of USO as measured by changes in its per share NAV was 82.91%.

This is based on an initial per share NAV of $69.10 as of December 31, 2025 and an ending per share NAV as of March 31, 2026 of $126.39.

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

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 $71.34 as of September 30, 2025, for a total return over the relevant time period of (5.44)%.

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 $125.62 as of March 31, 2026, for a total return over the relevant time period of 81.80%.

The difference between the actual per share NAV total return of USO of 82.91% and the expected total return based on the Benchmark Oil Futures Contract of 81.80% was a difference over the time period of 1.11%, 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 Oil Futures Contract tend 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.

By comparison, for the nine months ended September 30, 2024, the actual total return of USO as measured by changes in its per share NAV was 4.41%.

This is based on an initial per share NAV of $66.91 as of December 31, 2023 and an ending per share NAV as of September 30, 2024 of $69.86.

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 higher/lower than daily changes in the price of the Benchmark Oil Futures Contract.

By comparison, for the three months ended March 31, 2025, the actual total return of USO as measured by changes in its per share NAV was 2.52%.

This is based on an initial per share NAV of $75.45 as of December 31, 2024 and an ending per share NAV as of March 31, 2025 of $77.35.

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

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 $67.81 as of September 30, 2024, for a total return over the relevant time period of 1.35%.

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 $76.16 as of March 31, 2025, for a total return over the relevant time period of 0.94%.

The difference between the actual per share NAV total return of USO of 2.52% and the expected total return based on the Benchmark Oil Futures Contract of 0.94% was a difference over the time period of 1.58%, 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 Oil Futures Contract tend to cause daily changes in the per share NAV of USO to track slightly higher or 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 tend to cause daily changes in the per share NAV of USO to track slightly lower or 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.

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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 third 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).

During the first quarter of 2026 the rolling 30 day average daily difference between the return of USO’s NAV and the Benchmark Oil Futures Contract was 0.010% 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.

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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 nine months ended September 30, 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.

During the three months ended March 31, 2026, 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.

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At the same time, USO earns dividend and interest income on its cash, cash equivalents and Treasuries.

USO is not required to distribute any portion of its income to its shareholders and did not make any distributions to shareholders during the nine months ended September 30, 2025.

USO is not required to distribute any portion of its income to its shareholders and did not make any distributions to shareholders during the three months ended March 31, 2026.

Interest payments, and any other income, were retained within the portfolio and added to USO’s NAV.

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In that case, the error in tracking the Benchmark Oil Futures Contract could result in daily changes in the per share NAV of USO that are either too high, or too low, relative to the daily changes in the Benchmark Oil Futures Contract.

During the nine months ended September 30, 2025, USO held OTC swaps, which are considered Other Oil-Related Investments.

If USO increases in size, and due to its obligations to comply with market conditions, regulatory limits, and risk mitigation measures imposed by its

FCMs, USO may invest in additional Other Oil-Related Investments, such as OTC swaps, which may have the effect of increasing transaction related expenses and may result in increased tracking error.

During the three months ended March 31, 2026, USO held OTC swaps, which are considered Other Oil-Related Investments.

If USO increases in size, and due to its obligations to comply with market conditions, regulatory limits, and risk mitigation measures imposed by its FCMs, USO may invest in additional Other Oil-Related Investments, such as OTC swaps, which may have the effect of increasing transaction related expenses and may result in increased tracking error.

OTC swaps increase transaction-related expenses due to the fact that USO must pay to the swap counterparty certain fees that USO does not have to pay for transactions executed on an exchange.

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

Although the price of the near month futures contract and the price of the 13 th month futures contract tend to move together, it can be seen that at times the

near month futures contract prices are higher than the 13 th month futures contract prices (backwardation) and, at other times, the near month futures contract prices are lower than the 13 th month futures contract prices (contango).

Although the price of the near month futures contract and the price of the 13 th month futures contract tend to move together, it can be seen that at times the near month futures contract prices are higher than the 13 th month futures contract prices (backwardation) and, at other times, the near month futures contract prices are lower than the 13 th month futures contract prices (contango).

*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

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

Crude oil flipped back into contango in January 2020 and remained predominantly in contango throughout 2020.

Crude oil flipped back into contango in January 2020.

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.

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.

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.

An estimated twenty million barrels a day of crude demand evaporated as a result of quarantines and massive drops in industrial and manufacturing activity.

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The supply cut along with the partial reopening of economies during the third quarter of 2020 reduced some of the unprecedented volatility that oil markets experienced in the Spring of 2020.

During the twelve months ended December 31, 2020, the crude oil futures market spent time in both a state of contango and backwardation as measured by the difference between the front month and the second month contract, whereas the crude oil futures market has primarily been in a state of backwardation since 2021 as measured by the difference between the front month and the second month contract.

As a result of market and regulatory conditions, including significant market volatility, large numbers of USO shares purchased during a short period of time, applicable regulatory accountability levels and position limits on oil futures contracts and risk mitigation measures that were taken by USO and USO’s FCM in 2020, USO invested in Oil Futures Contracts with expiration dates for months later than that of the Benchmark Oil Futures Contract.

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During the three months ended March 31, 2026, the crude oil futures market was in a state of backwardation.

Crude Oil Market .

During the nine months ended September 30, 2025, the price of the front month WTI crude oil futures contract traded in a range between $57.13 to $80.04.

Prices decreased (13.04)% from December 31, 2024 through September 30, 2025, finishing the quarter at $62.37.

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 third quarter of 2025, U.S.

crude oil production averaged 13.4 mbd.

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 during the nine months ending September 30, 2025, but remained below pre- and post-pandemic highs.

OPEC fiercely supported prices with voluntary cuts and production quotas from mid-2022 to late 2024.

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

While OPEC has 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 .

During the three months ended March 31, 2026, the price of the front month WTI crude oil futures contract traded in a range between $55.99 to $102.88.

Prices increased 76.56% from December 31, 2025 through March 31, 2026, finishing the quarter at $101.38.

The Iran War was the primary driver of crude oil prices during the first quarter of 2026.

Global crude oil supply exceeded demand in January and February of 2026.

Supply plunged below demand after the start of hostilities and Iran’s closure of the Strait of Hormuz, which threatens approximately 20% of the world’s oil supply.

Energy Information Association estimated that Iraq, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain collectively shut in 7.5 million barrels per day (mbd) of crude oil production by March 31, 2026.

The daily amount of crude oil supply impacted by the war is expected to increase the longer the Strait of Hormuz remains closed and infrastructure in oil producing countries remains offline.

crude oil production averaged approximately 13.7 mbd in the first quarter of 2026, down from an all-time high of 13.8 mbd reached in October of 2025.

However, U.S.

production has increased significantly over the last five years.

OPEC crude production, which had been rising since 2024, dropped significantly from 29.6 mbd in February to 22.1 mbd in March.

OPEC output had been rising prior to the war as the cartel continued to gradually unwind voluntary cuts and quotas that were established to support market prices between 2022 and 2024.

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.

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

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 production may not rise as much in the future as it has in the recent past.

drillers have shown restraint in recent years, so 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.

In April of 2025, the Trump administration announced large and widespread tariffs on trading partners.

While no tariffs on crude oil itself were announced, and the administration later paused tariff implementation and announced changing tariff levels on a country-by-country basis, the overall impact of the administration's actions may increase the risk of a global economic slowdown or recession, which would reduce demand for crude oil.

As negotiations with trading partners continue, final trade policy remains elusive and crude oil prices may be volatile as a result.

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

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 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.

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.

The potential impact of the Iran war on producer’s appetites for increased drilling remains uncertain.

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 could reduce demand for crude oil.

Ongoing global tensions, with existing and potential conflicts in various regions, could increase supply disruptions, which could raise prices.

Conversely, any resolution of geopolitical conflicts could further 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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The correlation is scaled between 1 and -1, where 1 indicates that the two investment options move up or down in price or value together, known as “positive correlation,” and -1 indicates that they move in completely opposite directions, known as “negative correlation.” A correlation of 0 would mean that the movements of the two are neither positively nor negatively correlated, known as “non-correlation.” That is, the investment options sometimes move up and down together and other times move in opposite directions.

For the ten-year time period between September 30, 2015 and September 30, 2025, the table below compares the monthly movements of crude oil prices versus the monthly movements of the prices of several other energy commodities, such as natural gas, diesel-heating oil, and unleaded gasoline, as well as several major non-commodity investment asset classes, such as large cap U.S.

For the ten-year time period between March 31, 2016 and March 31, 2026, the table below compares the monthly movements of crude oil prices versus the monthly movements of the prices of several other energy commodities, such as natural gas, diesel-heating oil, and unleaded gasoline, as well as several major non-commodity investment asset classes, such as large cap U.S.

equities, U.S.

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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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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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Income received from USO’s investments in money market funds and Treasuries is paid to USO.

During the nine months ended September 30, 2025, USO’s expenses did not exceed the income USO earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the nine months ended September 30, 2025, USO did not use other assets to pay expenses.

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

During the three months ended March 31, 2026, USO’s expenses did not exceed the income USO earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the three months ended March 31, 2026, USO did not use other assets to pay expenses.

To the extent income exceeds 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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Such market conditions could prevent USO from promptly liquidating its positions in Futures Contracts.

During the nine months ended September 30, 2025, USO did not purchase or liquidate any of its positions while daily limits were in effect;

During the three months ended March 31, 2026, USO did not purchase or liquidate any of its positions while daily limits were in effect;

however, USO cannot predict whether such an event may occur in the future.

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Similarly, under its current OTC agreements, USO requires that collateral it posts or receives be posted with its custodian, and under agreements among the custodian, USO and its counterparties, such collateral is segregated.

USO may purchase OTC swaps in the future periods, see “Item 3.

Quantitative and Qualitative Disclosures About Market Risk” in this quarterly report on Form 10-Q for a discussion of OTC swaps.

As of September 30, 2025, USO held cash deposits and short-term investments in the amount of $901,511,887 with the custodian and FCMs.

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

As of March 31, 2026, USO held cash deposits and short-term investments in the amount of $2,300,218,065 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.

Off Balance Sheet Financing

As of September 30, 2025, USO had no loan guarantee, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of USO.

As of March 31, 2026, USO had no loan guarantee, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of USO.

While USO’s exposure under these indemnification provisions cannot be estimated, they are not expected to have a material impact on USO’s financial position.

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Either party may terminate these agreements earlier for certain reasons described in the agreements.

As of September 30, 2025, USO’s portfolio held 11,962 Oil Futures Contracts traded on the NYMEX.

As of September 30, 2025, USO did not hold any Oil Futures Contracts traded on the ICE Futures.

As of March 31, 2026, USO’s portfolio held 23,766 Oil Futures Contracts traded on the NYMEX.

As of March 31, 2026, USO did not hold any Oil Futures Contracts traded on the ICE Futures.

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

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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-Q

Item 2. Management’s Discussion and Analysis