Buying Oil and Gas - Commodities Trading

📈 Investing & Markets
#1

Assalamo alaikoum

Is there a permissible way to invest in Gas or Oil directly (without Buying STOCK or ETF of Oil/Gas companies)
Future Contract, SPOTs, CFDs like:
SPOT BRENT CRUDE OIL
SPOT WTI CRUDE OIL
NATURAL GAS FUTURES
CRUD OIL

are not permissible or am i wrong ?

#2

Walaikum Assalaam @zern, great to see you again!

My understanding has always been that trading futures aren’t permissible. I would be interested in hearing if someone has anything different.

Here’s Sh Joe answering a question about commodities trading in general. Maybe an Islamic brokerage might have a product’s shariah compliant.

Has anyone else come across something compliant anywhere?

#3

Asslaam Alykom
As per my personal understanding that, to be sharia complaint for buying and selling products, there are 3 basic rules to be fulfilled:
1- The product shouldn’t be unknown, and undefined.
2- The value should be defined,
3- The seller must own the product to be legible for him to sell. You cant buy something from a seller who don’t have the product yet or promise to fish and bring.

Also you shouldn’t buy/ sell fruit while still in the tree before being reaped.

Furthermore, it is unacceptable to buy the fruit from the farmer and sell in the market adding your profit on the price, as advise by Rasoulallah PBUH, the farmer should sell his harvested fruit to the market and sell according to market price, not selling to a mediator. Having intermediate person makes price higher, which reflects negatively on the buyers or society.
All shariah rules are based on fair interest of buyer, seller and whole society.

This is my contribution Allah and Rasoul Allah PBUH know better.

Above I learned and understood from Shaikh in Masjid.

Quote: Syedinah Omer bin alkhttab Ridi Allah Anhu. said:
“No one from us should enter our market without Shariah Knowledge”

Regards

#4

Salam alaykum

Regarding your 3rd condition

CONCERNING the shares, we actually own the shares in 1 to 2 days. But it is possible to sell them before.

What do you think ?

#5

@zern @Farhan

Wa alaikum salam

This is for malaysia market. Shariah compliant futures.

1 Like
#6

@Abdul_mousa

Wa alaikum salam, good post, this is supposed to be correct way.

#7

Assalam

Thank you all for your messages
After searching, i found an easy solution to profit from oil/gaz uptrend :
A/ Buy oil/gaz companies stocks like EXXON / CHEVRON
B/ Buy oil/gaz Exploration companies stocks like COP / EOG

To find the best companies on a sector, you can check the top 5 in an ishare ETF und pick the permissible ones.
Here is an example for the Oil & Gas Exploration:

#8

In theory this works…bear in mind the obvious risks of things like windfall tax, nationalisation, price controls etc. on top of normal business risk. i.e. oil price wont be affected by that.