BNO Swings to Profit Amidst Declining Assets and Share Redemptions

TL;DR

**BNO's Q3 profit is a mirage; declining assets and heavy redemptions signal a bearish outlook for this Brent oil tracker.**

AI Summary

The United States Brent Oil Fund, LP (BNO) reported a net income of $1,403,960 for the nine months ended September 30, 2025, a significant improvement from a net loss of $1,644,068 for the same period in 2024. Total assets decreased to $102,248,272 as of September 30, 2025, from $114,873,867 at December 31, 2024. This decline was primarily driven by a negative change in unrealized gain (loss) on open commodity futures contracts, shifting from a gain of $2,601,040 at December 31, 2024, to a loss of $1,699,840 at September 30, 2025. Partners' Capital also decreased from $114,528,171 to $101,981,085 over the same period, largely due to net redemptions of partnership shares totaling $97,534,973, outweighing additions of $83,583,927. The fund's investment objective remains to track the daily changes in the spot price of Brent crude oil, as measured by the Benchmark Futures Contract, plus interest earned on collateral, less expenses. BNO held 1,545 ICE Brent Crude Futures CO December 2025 contracts as of September 30, 2025, with a notional amount of $103,716,190.

Why It Matters

For investors, BNO's shift to a net income of $1.4 million for the nine months ended September 30, 2025, from a loss in the prior year, indicates improved operational performance despite a decrease in total assets. The significant net redemptions of $97.5 million in partnership shares suggest waning investor confidence or a shift in market sentiment towards Brent crude oil, potentially impacting liquidity and market depth for the ETF. The competitive landscape for oil-tracking ETFs means BNO must consistently meet its investment objective to retain and attract capital, especially given the impact of contango and backwardation on long-term returns. Employees and customers of USCF, the general partner, are affected by the fund's performance and asset base, which influence management fees and operational stability.

Risk Assessment

Risk Level: medium — The fund's risk level is medium due to its exposure to commodity price volatility and the impact of contango and backwardation. The unrealized loss on open commodity futures contracts of $1,699,840 at September 30, 2025, compared to a gain of $2,601,040 at December 31, 2024, highlights this volatility. Additionally, the significant net redemption of $97,534,973 in partnership shares for the nine months ended September 30, 2025, indicates potential liquidity challenges or declining investor interest.

Analyst Insight

Investors should exercise caution and closely monitor Brent crude oil price trends and the impact of contango/backwardation on BNO's performance. Consider reducing exposure if oil price volatility persists or if net redemptions continue, as this could signal further erosion of the fund's asset base and potential tracking error issues.

Financial Highlights

debt To Equity

0.00

revenue

N/A

operating Margin

N/A

total Assets

$102,248,272

total Debt

$0

net Income

$1,403,960

eps

$0.41

gross Margin

N/A

cash Position

$83,694,034

revenue Growth

N/A

Key Numbers

• $102.2M — Total Assets (Decreased from $114.9M at Dec 31, 2024, indicating a shrinking asset base.)
• $1.4M — Net Income (For the nine months ended Sep 30, 2025, a swing from a $1.6M loss in the prior year.)
• -1.67% — Unrealized Gain (Loss) on Open Commodity Futures Contracts (As a percentage of Partners' Capital at Sep 30, 2025, a significant decline from 2.27% gain at Dec 31, 2024.)
• 3,400,000 — Limited Partners' shares outstanding (Decreased from 3,800,000 at Dec 31, 2024, reflecting net redemptions.)
• $29.99 — Net asset value per share (Slightly decreased from $30.14 at Dec 31, 2024.)
• $97.5M — Redemption of partnership shares (For the nine months ended Sep 30, 2025, indicating significant outflows.)
• $83.6M — Cash and cash equivalents (At Sep 30, 2025, a portion designated for daily Futures Commission Merchants' margin requirements.)
• 1,545 — ICE Brent Crude Futures CO December 2025 contracts (Number of open long contracts held at Sep 30, 2025.)
• $103.7M — Notional Amount of Open Commodity Futures Contracts (For ICE Brent Crude Futures CO December 2025 contracts at Sep 30, 2025.)
• 4.09% — 7-day yield of Dreyfus Institutional Preferred Government Money Market Fund (At September 30, 2025, contributing to interest income.)

Key Players & Entities

• United States Brent Oil Fund, LP (company) — registrant
• United States Commodity Funds LLC (company) — general partner
• NYSE Arca, Inc. (regulator) — exchange where shares are traded
• ICE Futures Europe Exchange (company) — exchange for Brent crude oil futures
• ALPS Distributors, Inc. (company) — marketing agent
• $102,248,272 (dollar_amount) — Total Assets at September 30, 2025
• $114,873,867 (dollar_amount) — Total Assets at December 31, 2024
• $1,403,960 (dollar_amount) — Net Income for nine months ended September 30, 2025
• $1,644,068 (dollar_amount) — Net Loss for nine months ended September 30, 2024
• $97,534,973 (dollar_amount) — Redemption of partnership shares for nine months ended September 30, 2025

FAQ

Risk Factors

• Volatility of Brent Crude Oil Prices [high — market]: BNO's investment objective is to track the daily changes in the spot price of Brent crude oil. Fluctuations in oil prices directly impact the value of BNO's holdings, particularly its open commodity futures contracts. For the nine months ended September 30, 2025, the fund experienced a shift from an unrealized gain of $2,601,040 to a loss of $1,699,840 on these contracts, highlighting the sensitivity to price movements.
• Net Redemptions Impacting Asset Base [medium — financial]: The fund experienced significant net redemptions of partnership shares totaling $97,534,973 for the nine months ended September 30, 2025. This outflow, which exceeded additions of $83,583,927, led to a decrease in total assets from $114,873,867 at December 31, 2024, to $102,248,272 at September 30, 2025. A shrinking asset base can impact the fund's ability to efficiently track its benchmark.
• Reliance on Futures Contracts and Margin Requirements [medium — operational]: BNO invests primarily in futures contracts, which are subject to margin requirements. As of September 30, 2025, BNO held 1,545 ICE Brent Crude Futures CO December 2025 contracts with a notional amount of $103,716,190. A portion of its cash and cash equivalents, $19,876,971, was designated for margin requirements, indicating operational reliance on these instruments.
• Tracking Error and Investment Objective Deviation [medium — market]: BNO aims for its daily NAV percentage change to be within +/- 10% of the Benchmark Futures Contract's daily percentage change over 30 successive valuation days. However, the fund's objective is met even with significant deviations if the average over 30 days is within this band. This introduces a potential for tracking error, where the fund's performance may not perfectly mirror spot Brent crude oil prices.
• Changes in Unrealized Gains/Losses [high — financial]: The shift in unrealized gains/losses on open commodity futures contracts from a gain of $2,601,040 at December 31, 2024, to a loss of $1,699,840 at September 30, 2025, significantly impacted the fund's financial condition and net asset value. This volatility directly affects the fund's profitability and partners' capital.

Industry Context

The Brent crude oil market is a global benchmark for oil pricing, influenced by geopolitical events, supply and demand dynamics, and economic growth. As a commodity pool, BNO operates within a highly volatile sector where price swings can be rapid and significant. The industry is characterized by the extensive use of futures contracts for hedging and speculation, making it sensitive to macroeconomic trends and energy policy.

Regulatory Implications

As a commodity pool, BNO is subject to regulations governing derivatives and commodity trading. Compliance with rules set by bodies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) is essential. Changes in these regulations, particularly those related to margin requirements or trading limits, could impact BNO's operations and costs.

What Investors Should Do

1. Monitor Brent Crude Oil Price Volatility
2. Assess Net Redemption Trends
3. Understand Tracking Error Potential
4. Evaluate Unrealized Gains/Losses

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported net income of $1,403,960, a significant improvement from a net loss in the prior year. Total assets decreased to $102,248,272 due to net redemptions and a shift in unrealized gains/losses on futures contracts.
• 2024-12-31: As of December 31, 2024 — Total assets were $114,873,867, with an unrealized gain of $2,601,040 on open commodity futures contracts. Limited partners' shares outstanding were 3,800,000.
• 2009-09-02: Organization Date — United States Brent Oil Fund, LP (BNO) was organized as a limited partnership, establishing its structure and investment vehicle.

Glossary

Benchmark Futures Contract

The specific short-term futures contract on Brent crude oil used to measure the daily changes in the spot price of Brent crude oil for BNO's investment objective. (Crucial for understanding how BNO aims to track oil price movements.)

Commodity Pool

An investment vehicle that trades in commodity futures contracts, options on futures, or physical commodities. (BNO is structured as a commodity pool, indicating its investment strategy involves commodity-linked derivatives.)

Net Asset Value (NAV)

The per-share market value of a fund, calculated by taking the total value of its assets, subtracting liabilities, and dividing by the number of outstanding shares. (BNO's investment objective is tied to the daily percentage changes in its NAV relative to the Brent crude oil benchmark.)

Futures Commission Merchants (FCMs)

Entities that solicit or accept customer orders for futures contracts and that accept money or other property to margin such trades. (BNO relies on FCMs for its trading operations and must maintain collateral to meet their margin requirements.)

Notional Amount

The total value of the underlying assets or contracts that a derivative is based on. It is not the amount of money exchanged. (Indicates the scale of BNO's exposure to Brent crude oil futures, with $103,716,190 for December 2025 contracts.)

Unrealized Gain (Loss)

The profit or loss on a financial instrument that has not yet been sold or settled. It represents the change in value from the purchase price or opening of the position. (A key driver of BNO's net income and changes in partners' capital, as seen in the shift from a gain to a loss on futures contracts.)

Net Redemptions

The situation where the value of shares redeemed by investors exceeds the value of new shares issued. (A significant factor in the decrease of BNO's total assets and partners' capital, totaling $97,534,973 for the nine months ended September 30, 2025.)

Year-Over-Year Comparison

Compared to the period ended September 30, 2024, BNO has shown a significant financial turnaround, reporting a net income of $1,403,960 versus a net loss of $1,644,068. However, its asset base has contracted, with total assets decreasing from $114,873,867 at December 31, 2024, to $102,248,272 as of September 30, 2025. This decline is largely attributable to a substantial increase in net redemptions of partnership shares and a negative swing in unrealized gains on commodity futures contracts.

Filing Documents

• bno-20250930x10q.htm (10-Q) — 1050KB
• bno-20250930xex31d1.htm (EX-31.1) — 14KB
• bno-20250930xex31d2.htm (EX-31.2) — 14KB
• bno-20250930xex32d1.htm (EX-32.1) — 9KB
• bno-20250930xex32d2.htm (EX-32.2) — 8KB
• bno-20250930x10q010.jpg (GRAPHIC) — 50KB
• bno-20250930x10q011.jpg (GRAPHIC) — 58KB
• bno-20250930x10q012.jpg (GRAPHIC) — 70KB
• bno-20250930x10q013.jpg (GRAPHIC) — 63KB
• 0001104659-25-108402.txt ( ) — 4609KB
• bno-20250930.xsd (EX-101.SCH) — 39KB
• bno-20250930_cal.xml (EX-101.CAL) — 23KB
• bno-20250930_def.xml (EX-101.DEF) — 100KB
• bno-20250930_lab.xml (EX-101.LAB) — 248KB
• bno-20250930_pre.xml (EX-101.PRE) — 170KB
• bno-20250930x10q_htm.xml (XML) — 576KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. 1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . 17

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 34

Controls and Procedures

Item 4. Controls and Procedures. 35

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 36

Risk Factors

Item 1A. Risk Factors. 39

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 39

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 39

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 39

Other Information

Item 5. Other Information. 40

Exhibits

Item 6. Exhibits. 41 Table of Contents

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Index to Financial Statements Documents Page 2 Schedules of Investments at September 30, 2025 (Unaudited) and December 31, 2024 3 5 6 7

Notes to Financial Statements (Unaudited) for the period ended September 30, 2025

Notes to Financial Statements (Unaudited) for the period ended September 30, 2025 8 1 Table of Contents United States Brent Oil Fund, LP At September 30, 2025 (Unaudited) and December 31, 2024 September 30, 2025 December 31, 2024 Assets Cash and cash equivalents (at cost $ 83,694,034 and $ 80,077,619 , respectively) (Notes 2 and 5) $ 83,694,034 (a) $ 80,077,619 Equity in trading accounts: Cash and cash equivalents (at cost $ 19,876,971 and $ 31,741,220 , respectively) 19,876,971 31,741,220 Unrealized gain (loss) on open commodity futures contracts ( 1,699,840 ) 2,601,040 Dividends receivable 254,722 314,421 Interest receivable 92,334 134,852 Prepaid insurance 30,051 4,715 Total Assets $ 102,248,272 $ 114,873,867 Liabilities and Partners' Capital General Partner management fees payable (Note 3) $ 64,588 $ 77,477 Professional fees payable 198,867 264,182 Brokerage commissions payable 163 163 Directors' fees payable 3,569 3,874 Total Liabilities 267,187 345,696 Commitments and Contingencies (Notes 3, 4 & 5) Partners' Capital General Partners — — Limited Partners 101,981,085 114,528,171 Total Partners' Capital 101,981,085 114,528,171 Total Liabilities and Partners' Capital $ 102,248,272 $ 114,873,867 Limited Partners' shares outstanding 3,400,000 3,800,000 Net asset value per share $ 29.99 $ 30.14 Market value per share $ 30.05 $ 29.95 (a) A portion of this amount is designated to meet daily Futures Commission Merchants' margin requirements. See accompanying notes to financial statements. 2 Table of Contents United States Brent Oil Fund, LP Schedule of Investments (Unaudited) At September 30, 2025 Fair Value/Unrealized Gain (Loss) on Open Number of Commodity % of Partners' Notional Amount Contracts Contracts Capital Open Commodity Futures Contracts - Long United Kingdom

Notes to Financial Statements (Unaudited)

Notes to Financial Statements (Unaudited) For the period ended September 30, 2025 NOTE 1 — ORGANIZATION AND BUSINESS The United States Brent Oil Fund, LP ("BNO") was organized as a limited partnership under the laws of the state of Delaware on September 2, 2009. BNO is a commodity pool that issues limited partnership interests ("shares") traded on the NYSE Arca, Inc. (the "NYSE Arca"). BNO will continue in perpetuity, unless terminated sooner upon the occurrence of one or more events as described in its Fourth Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (the "LP Agreement"), which grants full management and control to its general partner, United States Commodity Funds LLC ("USCF"). The investment objective of BNO is for the daily changes in percentage terms of its shares' per share net asset value ("NAV") to reflect the daily changes in percentage terms of the spot price of Brent crude oil, as measured by the daily changes in the price of a specified short-term futures contract on Brent crude oil called the "Benchmark Futures Contract", plus interest earned on BNO's collateral holdings, less BNO's expenses. The Benchmark Futures Contract is the futures contract on Brent crude oil as traded on the ICE Futures Europe Exchange (the "ICE Futures") that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire. BNO seeks to achieve its investment objective by investing so that the average daily percentage change in BNO's NAV for any period of 30 successive valuation days will be within plus/minus ten percent ( 10 %) of the average daily percentage change in the price of the Benchmark Futures Contract over the same period. As a result, investors should be aware that BNO would meet its investment objective even if there are significant deviations between changes in its daily NAV an

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