United States Brent Oil Fund (BNO) risk factors, FY2025 10-K

Other

1. 01The following risk factors should be read in connection with the other information included in this annual report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and BNO’s financial statements and the related notes
2. 02Other factors impacting the Brent crude oil market. The supply of and demand for crude oil may also be impacted by changes in interest rates, inflation, and other local or regional market conditions, as well as by the development of alternative energy sources
3. 03Natural disasters, public health disruptions (such as the COVID-19 pandemic), and international armed conflicts could impact the price of commodities and/or the value, pricing and liquidity of BNO’s investments or assets which, in turn, could cause the loss of your investment in BNO31% rewritten
4. 04Historical performance of BNO and the Benchmark Futures Contract is not indicative of future performance
5. 05An investment in BNO may provide little or no diversification benefits. Thus, in a declining market, BNO may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in BNO while incurring losses with respect to other asset classes
6. 06The market price at which investors buy or sell shares may be significantly less or more than NAV
7. 07Daily percentage changes in BNO’s NAV may not correlate with daily percentage changes in the price of the Benchmark Futures Contract
8. 08Daily percentage changes in the price of the Benchmark Futures Contract may not correlate with daily percentage changes in the spot price of Brent crude oil
9. 09An investment in BNO is not a proxy for investing in the crude oil markets, and the daily percentage changes in the price of the Benchmark Futures Contract, or the NAV of BNO, may not correlate with daily percentage changes in the spot price of Brent crude oil
10. 10Natural forces in the crude oil futures market known as “backwardation” and “contango” may increase BNO’s tracking error and/or negatively impact total return
11. 11The Benchmark Futures Contract is not subject to position limits under the Position Limits Rule and, therefore, the Position Limits Rule is not expected to impact the ability of BNO to meet its investment objective

Tax Risk

1. 12An investor’s tax liability may exceed the amount of distributions, if any, on its shares
2. 13An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares
3. 14BNO could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 15BNO is organized and operated as a limited partnership in accordance with the provisions of the LP Agreement and applicable state law, and therefore, BNO has a more complex tax treatment than traditional mutual funds
5. 16If BNO is required to withhold tax with respect to any non-U.S. shareholders, the cost of such withholding may be borne by all shareholders
6. 17The impact of changes in U.S. federal income tax laws on BNO is uncertain70% rewritten
7. 18BNO will be subject to credit risk with respect to counterparties to OTC contracts entered into by BNO
8. 19Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments
9. 20BNO’s rights under an OTC contract may be restricted by regulations
10. 21The use of swap agreements may expose BNO to early termination risk, which could result in significant losses to BNO

Other Risks

1. 22BNO is not leveraged, but it could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments
2. 23BNO may temporarily limit the offering of Creation Baskets
3. 24Certain of BNO’s investments could be illiquid, which could cause large losses to investors at any time or from time to time
4. 25BNO may not meet the listing standards of NYSE Arca, which could adversely impact an investor’s ability to sell shares
5. 26The NYSE Arca may halt trading in BNO’s shares, which would adversely impact an investor’s ability to sell shares
6. 27Shareholders that are not Authorized Participants may only purchase or sell their shares in secondary trading markets, and the conditions associated with trading in secondary markets may adversely affect investors’ investment in the shares
7. 28The lack of an active trading market for BNO’s shares may result in losses on an investor’s investment in BNO at the time the investor sells the shares
8. 29Limited partners and shareholders do not participate in the management of BNO and do not control USCF, so they do not have any influence over basic matters that affect BNO
9. 30Under Delaware law, a limited partner might be held liable for BNO’s obligations as if it were a general partner if the limited partner participates in the control of the partnership’s business and the persons who transact business with the partnership think the limited partner is the general partner
10. 31There is a risk that BNO will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such BNO may not earn any profit
11. 32BNO is subject to extensive regulatory reporting and complianceNew
12. 33Regulatory changes or actions, including the implementation of new legislation are impossible to predict but may significantly and adversely affect BNO
13. 34BNO is not a registered investment company so shareholders do not have the protections of the 1940 Act
14. 35Trading in international markets could expose BNO to credit and regulatory risk
15. 36BNO and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
16. 37BNO could terminate at any time and cause the liquidation and potential loss of an investor’s investment and could upset the overall maturity and timing of an investor’s investment portfolio
17. 38BNO does not expect to make cash distributions
18. 39An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on BNO’s NAV
19. 40The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause BNO’s NAV to differ materially from its trading price
20. 41BNO may determine that, to allow it to reinvest the proceeds from sales of its Creation Baskets in currently permitted assets in a manner that meets its investment objective, it may limit or suspend its offers of Creation Baskets
21. 42BNO may be subject to interest rate risk, which may prevent BNO from investing fully at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss
22. 43Inflation is a general increase in the overall price level of goods and services in the economy. The United States Federal Reserve has a stated goal of maintaining a two percent increase in inflation over the long run, as measured by the annual change in the price index for personal consumption expenditures
23. 44BNO may potentially lose money by investing in government money market funds
24. 45The failure or bankruptcy of a clearing broker could result in a substantial loss of BNO’s assets and could impair BNO in its ability to execute trades
25. 46The failure or bankruptcy of BNO’s Custodian could result in a substantial loss of BNO’s assets
26. 47Competing claims of intellectual property rights may adversely affect BNO and an investment in BNO’s sharesNew
27. 48Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
28. 49BNO’s investment returns could be negatively affected by climate change and greenhouse gas restrictions
29. 50USCF is the subject of class action, derivative and other litigation. In light of the inherent uncertainties involved in litigation matters, an adverse outcome in this litigation could materially adversely affect USCF’s financial condition