Why ASX 200 energy stocks like Santos and Woodside shares are ending the week with a bang

Investors are bidding up Santos and Woodside shares today as ASX energy stocks rally.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published January 30, 1:34 pm AEDT

S&P/ASX 200 Index (ASX: XJO) energy stocks are enjoying a strong end to the week, and indeed a strong start to 2026.

During the Friday lunch hour, the ASX 200 is up 0.2%. This sees the benchmark index up a healthy 2.4% in the new year.

Here's how the big four ASX 200 energy stocks stack up:

Woodside Energy Group Ltd (ASX: WDS) shares are up 1% today and up 7.3% year to date
Santos Ltd (ASX: STO) shares are up 2.9% today and up 14.7% year to date
Beach Energy Ltd (ASX: BPT) shares are up 2.1% today and up 6.2% year to date
Karoon Energy Ltd (ASX: KAR) shares are up 3.3% today and up 13.5% year to date

Here's what's driving the outperformance.

Image of a fist holding two yellow lightning bolts against a red backdrop. — Image source: Getty Images

ASX 200 energy stocks buoyed by rising global oil prices

Many analysts had been advising investors in ASX 200 energy stocks like Woodside and Santos to expect ongoing weakness in global oil prices in 2026. Those forecasts are based on supply growth outpacing demand growth.

But the early days of the new year aren't quite playing out that way.

International benchmark Brent crude oil prices leapt 3.4% overnight to currently be trading for US$70.71 per barrel. That's the highest oil price since July. And it sees the Brent crude oil price up 16.2% in 2026.

Much of these gains look to be linked to increasing sabre rattling from United States President Donald Trump.

Indeed, oil prices have taken a sharp turn higher after Trump threatened to attack Iran if the nation doesn't make a deal on its nuclear ambitions.

US warships are steaming to the region, leading to fears of military conflict, and that Iran may retaliate by shutting down the Strait of Hormuz. It's far from the first time Iran has threatened to disrupt the vital, narrow shipping passage, with previous historic disruptions also sending global oil prices soaring.

Commenting on the geopolitical tensions impacting global oil markets, and by connection ASX 200 energy stocks like Santos and Woodside, Citigroup analyst Anthony Yuen said (quoted by Bloomberg):

The potential for Iran getting hit has escalated the geopolitical premium of oil prices by potentially US$3 to US$4 a barrel. Oil prices can stay more elevated than many had expected, despite markets starting the year anticipating large oversupply.

What's the latest on Woodside shares?

Woodside shares closed up 2.7% on Wednesday after the company released its December quarter results.

The ASX 200 energy stock reported record production for the full 2025 calendar year of 198.8 million barrels of oil equivalent (MMboe). Investors reacted positively, with production exceeding Woodside's full-year guidance of 192 to197 MMboe.

Woodside reported full-year revenue of US$12.98 billion.

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