Halal Oil & Energy ETFs – AAOIFI-Screened Energy Funds (June 2026)
The energy ETF universe is larger and more halal-friendly than most people assume. Oil company equity ETFs like XLE, VDE, IXC, and FENY currently pass AAOIFI Shariah screening — large oil majors hold modest debt relative to their massive market caps. The critical distinction is between equity-based ETFs (generally compliant) and futures-based oil ETFs (not halal).
🔗 Also see: Halal Stocks (76) | Halal Crypto (20) | Halal ETFs (12) | Gold ETFs (8)
Updated monthly • AAOIFI screened • Musaffa & MuslimXchange verified
Clickable energy ETF detail pages
9 pagesLatest screened energy fund movement
Latest halal energy ETF movers today
Preview the biggest gainers and losers inside the current halal oil and energy ETF passlist. Open the full performance page to compare the complete leaderboard.
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Top 3 energy ETF gainers
Rankings use the latest cached snapshot: Jul 7, 2026. Performance is market movement, not a halal verdict or buy signal.
Understanding the Energy ETF Landscape
Two of the three categories of energy ETFs are halal. One is clearly not:
✅ Oil Company Equity ETFs (AAOIFI Screened Compliant)
Hold stocks of oil & gas companies. Large oil majors (XOM, CVX, COP) pass HalalSignalz public debt ratio tests because their enormous market caps keep debt percentages well below the 30% threshold. Oil & gas extraction is a permissible business activity. Minor impure income (interest on cash) requires purification.
✅ Clean Energy ETFs (Generally Compliant)
Hold solar, wind, hydrogen, and clean infrastructure companies. Lower debt ratios, no haram revenue, and compliant business activities. A strong ethical and halal option for energy exposure.
❌ Oil Futures ETFs (Not Halal)
Hold crude oil futures contracts (USO, UCO, DBO). Futures are prohibited under Islamic finance — trading a commodity for future delivery constitutes gharar (excessive uncertainty). These are not permissible regardless of the underlying commodity.
Why Oil Majors Pass AAOIFI Debt Ratio Screening
A common misconception is that oil companies carry too much debt to pass Shariah screening. In practice, AAOIFI screens debt as a percentage of market capitalization — and major oil companies have very large market caps:
| Company | Market Cap | Net Debt | Debt / Mkt Cap | HalalSignalz (30%) |
|---|---|---|---|---|
| ExxonMobil (XOM) | ~$500B | ~$20B | ~4% | ✅ Pass |
| Chevron (CVX) | ~$250B | ~$15B | ~6% | ✅ Pass |
| ConocoPhillips (COP) | ~$120B | ~$7B | ~6% | ✅ Pass |
Approximate figures as of Q1 2026. Verify current data at Musaffa or MuslimXchange before investing.
✅ Approved Oil & Gas Company ETFs (AAOIFI Screened)
🛢️ Oil & Gas Company ETFs – Pass List (4)
- XLE – Energy Select Sector SPDR Fund
Top US oil & gas producers (XOM, CVX, COP) • Expense: 0.08% • AUM: ~$40B
✅ AAOIFI Compliant (Musaffa verified) • Purification required on dividends - VDE – Vanguard Energy ETF
100+ US energy companies, broad coverage • Expense: 0.09% • AUM: ~$10B
✅ AAOIFI Compliant (Musaffa verified) • Purification required on dividends - IXC – iShares Global Energy ETF
Global oil & gas companies (US + international) • Expense: 0.41% • AUM: ~$2B
✅ AAOIFI Compliant (MuslimXchange verified, June 2026) • Purification required - FENY – Fidelity MSCI Energy Index ETF
Broad US energy large & mid-cap • Expense: 0.08% • AUM: ~$2B
✅ AAOIFI Compliant (Musaffa verified) • Good alternative to XLE at same cost
⚠️ Shariah compliance of equity ETFs can change quarterly as company financials and fund holdings shift. Always re-verify before investing or on a quarterly basis.
✅ Clean Energy ETFs (Generally Compliant)
⚡ Clean Energy ETFs – Pass List (5)
- ICLN – iShares Global Clean Energy ETF
Global solar, wind & clean utilities • Expense: 0.40% • AUM: ~$2.5B
✅ Generally compliant — holds clean energy equities, no futures - QCLN – First Trust NASDAQ Clean Edge Green Energy Index Fund
US clean energy & EV companies • Expense: 0.58% • AUM: ~$500M
✅ Generally compliant — tech-forward clean energy, low debt holdings - ACES – ALPS Clean Energy ETF
North American clean energy broad basket • Expense: 0.55% • AUM: ~$300M
✅ Generally compliant — solar, wind, hydro, efficiency companies - CNRG – SPDR S&P Kensho Clean Power ETF
AI-selected clean power companies • Expense: 0.45% • AUM: ~$150M
✅ Generally compliant — power generation and storage focus - SMOG – VanEck Low Carbon Energy ETF
Low carbon intensity energy companies globally • Expense: 0.62% • AUM: ~$200M
✅ Generally compliant — screens out high-carbon and fossil-fuel companies
Energy ETF Comparison Table
| ETF | Type | Expense | Halal Status |
|---|---|---|---|
| XLE | US Oil & Gas Equity | 0.08% | ✅ Pass (AAOIFI) |
| VDE | US Energy Broad | 0.09% | ✅ Pass (AAOIFI) |
| IXC | Global Oil & Gas Equity | 0.41% | ✅ Pass (AAOIFI) |
| FENY | US Energy Large/Mid Cap | 0.08% | ✅ Pass (AAOIFI) |
| ICLN | Global Clean Energy | 0.40% | ✅ Pass |
| QCLN / ACES | US Clean Energy | 0.55–0.58% | ✅ Pass |
| USO / UCO / DBO | Oil Futures | 0.60–0.95% | ❌ Not Halal |
❌ Oil ETFs to Avoid (Futures-Based — Not Halal)
These ETFs use futures contracts and are not permissible under Islamic finance, regardless of your screening methodology:
- USO – United States Oil Fund – Holds WTI crude oil futures (gharar)
- UCO – ProShares Ultra DJ-ACS Crude Oil – 2× leveraged oil futures
- SCO – ProShares UltraShort Bloomberg Crude Oil – Inverse leveraged futures
- DBO – Invesco DB Oil Fund – Futures-based with rolling contracts
- OIL – iPath Pure Beta Crude Oil ETN – Exchange-traded note backed by futures
- Any leveraged or inverse energy ETF – Speculative by design, not halal
Total Approved: 9 ETFs (4 oil & gas equity + 5 clean energy) | Screening snapshot date: June 4, 2026