Did Joe Biden just boost the 2025 outlook for ASX 200 energy shares?

ASX 200 energy shares have been burning bright so far in 2025.

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S&P/ASX 200 Index (ASX: XJO) energy shares had a year to forget in 2024, with all the big Aussie oil and gas producers significantly underperforming the benchmark index.

Right up until the final week of December, that is. Which, not coincidentally, is when global oil prices hit a near-term bottom and began to march higher.

On 23 December, Brent crude oil was trading for US$72.63 per barrel. The price reached US$76.16 per barrel on 9 January. And oil has since soared back to the current US$80.97 per barrel, leaping some 5% since last Friday, courtesy of outgoing United States President Joe Biden.

We'll get back to Biden in a tick.

First, here's how these downtrodden ASX 200 energy shares have performed since market close on 19 December amid the turnaround in oil prices:

  • Woodside Energy Group Ltd (ASX: WDS) shares are up 12.7%
  • Santos Ltd (ASX: STO) shares are up 12.6%
  • Beach Energy Ltd (ASX: BPT) shares are up 12.8%
  • Karoon Energy Ltd (ASX: KAR) shares are up 20.7%

For some context, the ASX 200 has gained 0.8% over this same period.

Clearly, then, the rising oil price has been a boon to the big Aussie producers and their shareholders.

Which brings us back to the US and Biden's big last-minute move to sanction Russia's oil exports.

ASX 200 energy shares eyeing new US sanctions

Just weeks before Donald Trump replaces him in the White House, Biden announced an extensive new package of sanctions against Russia's multi-billion-dollar energy industry in an effort to starve the nation of the funds it needs to wage its war against Ukraine.

The new sanctions will hit scores of oil tankers moving Russian crude across the globe, as well as insurers and producers. With fears already circulating that this could significantly reduce Russian oil exports, at least over the short term, the oil price could rise further from here. Which would come as good news to ASX 200 energy shares.

The US sanctions could hit China and India particularly hard, with both nations relying heavily on discounted Russian oil imports. Roughly 30% of India's oil imports stem from Russia.

But that might be changing.

What are the experts saying?

Commenting on the impact of the new US sanction on global oil prices, and by connection ASX 200 energy shares, RBC Capital Markets LLC analysts, including Brian Leisen, said (quoted by Bloomberg):

Just one week into the year, we have already tested the top of the 'event risk premium' price range. The new Russian sanctions from the outgoing administration are a net addition to at-risk supply…

At face value, there's a case for Brent to reach the upper US$80-a-barrel range in the near term, all barrels considered, despite margin headwinds. That said, we've seen this scenario multiple times in recent years, and supply-chain resilience has consistently outperformed.

ASX 200 energy shares could catch additional tailwinds from a rising oil price in 2025 if Trump follows through on expectations he may target Iran's oil exports in retaliation for the nation's ongoing nuclear weapons ambitions.

Commenting on that outlook, Goldman Sachs analysts including Daan Struyven said:

Brent could rise just above the top of our range if Russian production briefly falls by 1 million barrels a day, and to US$90 a barrel in a combined scenario where Iran supply also falls 1 million barrels a day but in a persistent way.

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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