Amid escalating tensions in Iran, including closure of the Strait of Hormuz, oil prices traded higher by more than 20% at various points during overnight trading Sunday, sending crude close to record highs.
The commodity’s recent surge is benefiting an array of energy equities and the related ETFs, including the Alerian MLP ETF (AMLP). The $12 billion AMLP, which tracks the Alerian MLP Infrastructure Index (AMZI), jumped nearly 4% in the first week of March.
No investor is going to complain about a performance like that in such a short timeframe. Not when the asset notching that showing yields 7.54% as is the case with AMLP. On the other hand, experienced MLP investors often flock to this asset class for income and lack of correlations to oil market volatility, indicating they be unnerved by recent goings on in the Middle East. That’s a practical way of evaluating midstream energy assets and ETFs like MLP. Fortunately, there’s a sound fundamental case for AMLP exclusive of global conflict.
Assessing AMLP Advantages
Even before the conflict in Iran, some market observers, including Bank of America Research, waxed bullish on midstream energy.
“We have a favorable category view on the MLPs given that midstream is energy analyst Jean Ann Salisbury's favorite pick for 2026, along with strong returns, income potential and favorable valuations. No ratings changes were made to the category,” according to the bank.
The bank adds that Salisbury sees MLPs in a win-win position. These companies, including AMLP member firms, stand to benefit as oil prices, which could compel producers to up output. Likewise, even if prices retreat, MLPs could benefit because economic activity could expand, potentially stoking demand for energy transportation services.
Another point in favor of MLPs is that the group isn’t stretched on valuation. Bank of America notes the price-to-earnings ratios for major MLP ETFs in aggregate is around 15x, below the long-term average of 18x. Then there’s the asset class’s impressive long-term track record and robust income.
“Returns to MLPs ETF are strong over 5 years, with an annualized return of 22%,” notes Bank of America. “MLP ETFs offer attractive income opportunities, with average 12m yields at 4.9%.”
Another Midstream Idea to Consider
Advisors and investors searching for another energy income idea can consider the Alerian Energy Infrastructure ETF (ENFR), which is up a staggering 20+% year-to-date. That $410 million ETF, which turns 13 years old in October, sports a trailing 12-month distribution rate of 4.09%, implying its holdings aren’t strained by their dividend obligations and have the room to gradually grow those payouts over the long-term.
While ENFR has clearly notched an impressive start to 2026, the ETF may have more gas in its tank. Pun intended because it’s one of the premier avenues for tapping into the natural gas infrastructure trade because the fund devotes about 71% of its portfolio to companies operating in that space.
“This positioning is designed to capture rising US and Canadian natural gas flows and the structural tailwinds supporting G&P and pipeline systems tied to LNG exports and power demand, while emphasizing durable, fee-based cash flows that can support dividends and disciplined capital returns,” according to ALPS.