ASX 200 energy shares charging higher as G7 nations stress 'important role' of gas

The outperformance of ASX 200 energy shares today comes despite a slight retrace in the crude oil price over the weekend.

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Key points
  • ASX 200 energy shares are well into the green while the ASX 200 benchmark is down 0.17%
  • Santos and Woodside could both benefit from the renewed enthusiasm for LNG expressed at the G7 summit
  • Germany announced it will construct new gas-fired power stations

S&P/ASX 200 Index (ASX: XJO) energy shares are trouncing the benchmark today.

In late afternoon trade, the ASX 200 is down 0.17%.

But a strong performance from the top ASX energy stocks has helped send the S&P/ASX 200 Energy Index (ASX: XEJ) up 1.21% at this same time.

As for the leading ASX 200 oil and gas stocks, the Woodside Energy Group Ltd (ASX: WDS) share price is up 1.37% today.

The Santos Ltd (ASX: STO) share price is enjoying an even stronger run, up 2.14%.

The outperformance today comes despite a slight retrace in the crude oil price over the weekend.

So what's piquing ASX 200 investor interest?

Gas and oil worker working on pipeline equipment.

Image source: Getty Images

All eyes on the seven rich nations

I suspect it has to do with the G7 meeting, held in Hiroshima, Japan on Saturday.

Global energy security topped the list of discussions, with Europe still working to extricate itself from Russian gas exports.

In a move that was jeered by climate activists but will be welcomed by investors in ASX 200 energy shares, the group came out in support of increasing the global supply of liquefied natural gas (LNG).

According to a G7 statement, quoted by Reuters, increasing LNG deliveries is "necessary to accelerate the phase-out of our dependency on Russian energy".

The G7 nations stated:

We stress the important role that increased deliveries of LNG can play, and acknowledge that investment in the sector can be appropriate in response to the current crisis and to address potential gas market shortfalls provoked by the crisis…

In the exceptional circumstance of accelerating the phase out of our dependency on Russian energy, publicly supported investment in the gas sector can be appropriate as a temporary response.

Though publicly supported funding for new gas projects was labelled "temporary", that's a far cry from the 100% renewable push most G7 officials had been touting prior to Russia's invasion of Ukraine.

Germany went a step further in throwing up some potential tailwinds for the big energy shares.

Reuters cited a German government official as saying, "We also need some new gas power station[s], but they should be built in a way that they can run on green hydrogen later on as well."

How have these ASX 200 energy shares been performing?

The two ASX 200 energy shares have delivered markedly different returns to shareholders over the past 12 months.

Over the full year, the Santos share price is down 10% while Woodside shares are up 20%.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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