How to Invest in Foreign Oil
The majority of foreign oil is controlled by nationally-owned oil companies, which are often difficult to invest in--although there are exceptions. Information about these companies is often difficult to come by as data is often treated as state secrets. Despite this, it is quite possible to invest in many foreign oil companies. As intermediary investments, some people also buy foreign government bonds.
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Instructions
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Determine your strategy. Choose between investing in private companies that do business overseas or investing in nationally-owned corporations. Keep in mind that nationally-owned corporations are operated by the government for its own interests, not those of the shareholders.
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Conduct research about the oil production in your target country and what that company's plans are for the future. The Energy Information Administration of the US Department of Energy provides excellent easy to read data for curious investors (see Resources below).
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If you decide to invest in a nationally-owned company, choose one carefully. It can be a bit of a struggle, as relatively few are listed internationally. Significant exceptions include the Russian Gazprom, one of the premiere oil and natural gas extraction companies in the world. It's listed on the Russian Trading System (RTX), Moscow Interbank Currency Exchange (MICEX) and London Stock Exchange (LSE). Another such company is Sinopec, the national Chinese oil company. It's listed as SNP on the New York Stock Exchange (NYSE) as well as the LSE. Check each company in the countries that you would like to invest in to see if they are publicly listed. Search for the country or company name on RigZone and you will find a link to the company website (see Resources below).
Other nationally-owned companies, like Saudi Aramco or the Mexican PEMEX, are actually legally forbidden from accepting outside investment. -
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Consider investing in crude oil futures as an alternative to foreign oil stocks. Investing in options opens the opportunity for profiting on fluctuations in the value of oil. This allows you to invest directly into oil as a commodity, so you won't put your money at the mercy of any single company. Be aware that futures investment carries enormous risk.
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Invest in companies that provide services to foreign oil companies as another alternative to direct investment. The fortunes of these companies often rise and fall dependent on those of the major nationally-owned oil companies. An example of one such company is Halliburton, listed as HAL on the NYSE. You can find more listings of such companies at RigZone (see Resources below).
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Instruct your stock broker or use your favorite online trading platform to purchase stocks of the publicly traded foreign oil companies that interest you. If you plan to invest in crude oil futures or stock options, many trading platforms like TD Ameritrade (see Resources below) requires you to pass an exam before those abilities can be granted to your account.
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