The Woodside Petroleum Limited (ASX: WPL) share price touched a fresh 52-week high of $27.49 today.
After spending the majority of 2021 around the sub $25 mark, the energy giant's shares have since accelerated this year.
At the time of writing, Woodside shares have slightly retraced to trade at $27.40, up 3.51%.
What's elevating Woodside shares?
The price of oil has surged in recent times following a potential militarily conflict between regional power, Russia and Ukraine.
US president Joe Biden held a virtual meeting with Russian President Vladimir Putin yesterday. With no agreement reached to prevent a possible invasion, the price of oil has soared to nearly US$100 per barrel. It's worth noting that this is the highest level since late 2014 and is in stark contrast to when oil prices were in negative territory in 2020.
A number of pipelines run through Ukraine, connecting Europe with Russian gas and oil companies. Should war break out, there are fears that Russia could cease supplying the much-needed energy to dependant countries like Germany.
Currently, brent crude, considered as the benchmark for oil prices, is fetching for US$95.98 per barrel. This represents an increase of about 11.5% over the past month alone.
Further fuelling the energy market is that the supply of oil is extremely tight.
Last Friday, the International Energy Agency released its oil market report noting that Organisation of Petroleum Exporting Countries (OPEC) are unable to meet increased output targets.
World oil demand is rising 3.3 million barrels per day (mb/d) in 2022, returning to pre-COVID levels of 99.7 mb/d.
As for supply, disruptions and production shortfalls by some OPEC members are tempering growth expectations for 2022. In December, world oil supply rose by a modest 130 kb/d to 98.6 mb/d.
This leaves a global shortfall of around 900,000 barrels of oil per day at the current rate.
Pleasingly for Australian oil and gas producers, this could lead to export opportunities to fill the energy gap. Particularly at current prices, Woodside among other industry players stands to benefit from this turmoil.
The S&P/ASX 200 Index (ASX: XJO) is managing to keep afloat, up 0.38%, however, the S&P/ASX 200 Energy Index (ASX: XEJ) has climbed 3.42% today.
Woodside share price summary
The Woodside share price has gained almost 10% over the last 12 months and is up 25% year-to-date.
Based on today's price, Woodside commands a market capitalisation of roughly $26.57 billion, with approximately 969.63 million shares on issue.
