The Santos Ltd (ASX: STO) share price is catching investor attention this week.
At the time of writing, in Wednesday lunchtime trade, the shares are up around 1% and changing hands for $7.86 a piece.
Today's increase follows a run of share price rises recently. Since dipping to a low of $7.04 in late June, the shares have now rebounded over 11%.
They're now up around 27% year to date, but are around 0.5% below the trading levels seen this time last year.
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Why is everyone talking about the Santos share price?
There hasn't been any price-sensitive news out of Santos this week.
It looks like the ASX 200 oil and gas giant's share price is the talk of the town right now as conflict between the US and Iran continues to escalate.
Santos shares gradually cooled through June and into July, off the back of expectations that the conflict was winding down. When the original peace deal broke in June, Santos fell 8% in a single session.
But a stark reversal over the past two weeks has reinvigorated the war risk tailwinds that saw the company's shares fly higher earlier this year.
Escalating conflict has quickly caused a spike in oil prices, which in turn acts as a strong tailwind for Santos shares.
Trading Economics data shows that the price of WTI crude oil has now climbed past US$85 per barrel and is hovering near six-week highs as supply risks intensify across several major export routes even beyond the Middle East.
"President Donald Trump dismissed the likelihood of imminent talks with Iran while warning of additional strikes and pledging retaliation if Tehran-backed Houthi rebels in Yemen disrupted shipping through the Red Sea," Trading Economics said.
"The Red Sea has become a vital export corridor for Saudi Arabia during the conflict, enabling the kingdom to reroute part of its crude exports through pipelines and reduce reliance on the Strait of Hormuz. Meanwhile, a Kuwaiti tanker carrying oil products was struck in Hormuz, underscoring persistent threats to maritime traffic. Outside the region, traders are also monitoring a series of attacks on the Caspian Pipeline Consortium terminal along Russia's Black Sea coast, a key export hub for most of Kazakhstan's crude."
Company-specific tailwinds
Tightening oil supply isn't the only thing driving the Santos share price higher.
A few company-specific tailwinds, including a rise in production and improved cash flow, have also helped support the Santos share price recently.
In late April, Santos posted its March quarter update, revealing a 1% increase in production and a 3% rise in sales revenue compared with the prior quarter.
Its free cash flow from operations of US$383 million was in line with Q425, and management reaffirmed its FY26 production and cost guidance.
The company also recently confirmed it has now hit continuous production at its Pikka oil project in Alaska. The project is now producing about 20,000 barrels of oil per day, which will ramp up to 80,000 barrels per day during the third quarter of 2026.
What do brokers expect next?
The experts are still very bullish that the Santos share price can keep climbing higher this year.
TradingView data shows that the majority (12 out of 14) analysts have a buy or strong buy rating on the shares.
The average $8.48 target price implies a potential 8% upside, at the time of writing. But some are even more bullish that the shares could jump another 35% to a multi-year high of $10.66 a piece.
