It’s time to dip into your “crisis investing” toolbox.

Sure, gold is a safe haven during times of geopolitical turmoil. In recent articles, I’ve recommended high-quality plays on gold and other hard assets.

But there’s another crucial commodity that deserves a place in the hedges sleeve of your portfolio: crude oil. As of this writing, Russia’s military operation in Ukraine is weighing on global equities and lifting oil prices. Below, I show you an energy play that provides both growth and a hedge under these tumultuous conditions.

Russian President Vladimir Putin’s invasion of eastern Ukraine has been roiling equity and energy markets. Oil prices haven’t hit $100 per barrel since 2014, but they’re currently hovering at that level, as escalating violence in Ukraine disrupts energy supplies and provokes sanctions (see chart).Russia accounts for 12% of the world’s oil and 17% of its natural gas. Much of the country’s energy production is transported to Europe in pipelines that pass through Ukraine. As part of Western sanctions against Russia, Germany has mothballed the Russian-owned $11 billion Nord Stream 2 natural gas pipeline.

Supply disruptions equal higher prices. Analysts at JPMorgan Chase (NYSE: JPM) predict that oil prices could hit $125/bbl by the second quarter of 2022. Some analysts say crude could soar as high as $150/bbl.

Regardless of the Ukraine crisis, the multiyear trend is for continued demand for oil, especially in emerging markets where the rise of middle-class consumers is whetting appetites for a fossil-fuel dependent Western lifestyle.

Economic growth and supply imbalances already were driving crude oil prices higher. The combination of war in Ukraine and Western sanctions against Russia are powerful catalysts for more expensive oil.

The crude oil wild card…

Even in Western democracies, Putin is admired by certain people with a taste for strongman politics. But the fact is, “tough guy” Putin has proven to be an unimaginative leader. He never undertook the difficult task of diversifying Russia’s economy. Instead, he turned Russia into a petro-state and a kleptocracy, vastly enriching himself and his oligarch cronies.

As such, Russia is a wild card in oil markets. The country typically has been an unruly member of the OPEC+ cartel. The Ukraine invasion has put OPEC+ in uncharted territory.

OPEC+ refers to the 13 official members of the Organization of the Petroleum Exporting Countries and 10 other non-OPEC partners including Russia. The five founding members of OPEC were Venezuela, Iraq, Saudi Arabia, Iran and Kuwait. Now that autocrat Putin is isolated and at loggerheads with the global community, the cohesion of OPEC+ and its ability to calibrate oil prices is very much in doubt.

Watch This Video: Cry Havoc: How War Affects The Markets

Under these conditions, a shrewd investment bet now is the United States Oil Fund (USO), the most-popular exchange-traded fund (ETF) in the oil space with assets under management of $2.4 billion and an average daily volume of 5.2 million shares.

USO strives for an average daily percentage change in net asset value, for any period of 30 successive valuation days, to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.

USO on Wednesday reached a 52-week high and has risen 67% from its 52-week low price of $39.27 per share. This ETF probably has further to run, as underlying conditions give crude oil prices upward momentum. USO’s expense ratio is a reasonable 0.83%.

Despite the transition to green energy, oil remains the most valuable commodity in the world. Our investment team has found yet another compelling energy play and it’s on the cusp of exponential gains. Click here for our crude oil report.

John Persinos is the editorial director of Investing Daily.

Subscribe to John’s video channel: