The Woodside Energy Group Ltd (ASX: WDS) share price has tumbled 4.66% in morning trade on Tuesday. At the time of writing the shares have dropped to $29.90 a piece.
Despite today's decline, the ASX energy shares are still 26.37% higher for the year-to-date and 30.51% higher than this time 12 months ago.
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Why has the Woodside share price slumped today?
Rising oil prices have acted as a strong tailwind for Woodside shares over the past 10 days. Conflict in the Middle East has threatened the movement of oil in the region while shipping disruptions and production cuts caused prices to skyrocket to a multi-year high.
Trading Economics data shows that the price of WTI crude oil surged to a 4.5-year high of nearly US$120 per barrel yesterday after major Middle Eastern producers began cutting output following disruptions in the Strait of Hormuz.
With tanker traffic heavily restricted, several key producers, including Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, have started curbing production as storage facilities fill quickly.
What was a tailwind for the Woodside share price just a week ago, has now caused a reversal in the energy company's share price.
The price of oil has cooled to around US$85 per barrel, at the time of writing. The latest drop follows an announcement from US President Donald Trump that he thinks the war with Iran is nearing its end.
Trump has also said he plans to waive oil-related sanctions and have the US Navy escort tankers through the Strait of Hormuz. Meanwhile, G7 finance ministers said it will release oil from strategic reserves if necessary.
What's next for the Woodside share price?
While the cooling crude oil price has caused a slump in the Woodside share price today, the company's financials are still very strong.
The oil and gas giant reported a strong 2025 result in late-February which confirmed an all-time high full-year production of 198.8 million barrels of oil equivalent (MMboe), topping guidance.
Its costs fell 4% for the calendar year, and while revenue dropped 1%, its EBITDA was in line with 2024.
But the experts are still neutral about the near-term outlook for the stock.
While the outlook for the company itself is promising, ongoing conflict in the Middle East adds to concern about near-term volatility and share price risk.
TradingView data shows that 6 out of 15 analysts have a buy or strong buy rating on Woodside shares. Another seven have a hold rating, and two have a sell rating.
The average target price of $29.22 implies a potential 2.28% downside at the time of writing.
