It's been a rough start to the trading week for the S&P/ASX 200 Index (ASX: XJO) and many ASX 200 shares this Monday. At the time of writing, the ASX 200 has recovered slightly from its morning lows, but remains down by 0.42% at around 8,470 points. But it's a very different story when it comes to the BetaShares Crude Oil Index Complex ETF (ASX: OOO).

This ASX exchange-traded fund (ETF) is having quite a different day compared to most ASX shares. OOO units closed at $6.08 each last week. But this morning, those same units opened at $6.30 before rising as high as $6.32. That was a gain of nearly 4% at the time. At the time of writing, the fund has pulled back a little, but remains up a healthy 2.63% at $6.24 a unit.

So why is the Betashares Crude Oil ETF rising so enthusiastically on such a pessimistic day for the broader markets?

Well, to answer that question, we first have to look at how the Betashares Crude Oil ETF works. Yes, it is an exchange-traded fund. But unlike most ETFs, OOO doesn't actually hold shares of companies. Instead, it invests in, shockingly, crude oil. However, this fund does not just track the spot price of oil. It instead owns a portfolio of oil futures contracts.

Futures contracts are a type of derivative that represents ownership of an oil delivery set at a certain price. It might be, for example, 100,000 barrels of oil set for delivery in December 2025 at a price of US$65 a barrel.

How does the ASX's BetaShares Crude Oil ETF (OOO) work?

Whilst the value of crude oil futures contracts doesn't exactly correlate with the price of oil itself, they are still influenced by it. To illustrate, the value of the hypothetical contract discussed above would rise substantially if the spot price of crude oil rises to US$75 a barrel. Conversely, it would dramatically fall if oil dipped to US$55 a barrel.

This price movement is what the Betashares Crude Oil ETF aims to capture.

As such, today's spike in value for OOO units can be put down to oil price movements. As many of us would be aware, the United States joined Israel's attacks on Iran over the weekend. This has resulted in a spike in the oil price, given that Iran is a major producer of crude. Three weeks ago, the price of WTI crude was around US$60. Today, it is just under US$75.

There has been speculation that Iran could respond to these attacks by closing a vital shipping lane for oil – the Straight of Hormuz – which lies on its southern border. If that does occur, it would potentially catapult oil prices far higher.

Given this uncertainty and risk for a supply squeeze in the oil market, it's not surprising to see the Betashares Crude Oil ETF rising so enthusiastically today. This will be an interesting ASX ETF to keep an eye on this week.