The Woodside Energy Group Ltd (ASX: WDS) share price has fallen into the red on Tuesday.
At the time of writing, the shares are down around 1.5% and are changing hands at $30.97 a piece.
Despite the decline, the shares are still around 31% higher year to date and about 18% higher than 12 months ago.
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What has driven the Woodside share price higher?
Oil supply concerns have been a major theme so far in 2026, and the volatility that comes hand in hand with uncertainty around conflict in the Middle East has been a strong tailwind for Woodside shares over the past six months.
The US-Iran war has shown signs of cooling, but each time it looks like conflict is calming down, it ramps back up again. The region is highly volatile, and the movement of oil from the area will continue to be uncertain until a resolution is reached.
Shipping disruptions and production cuts pushed oil prices to a multi-year high of around US$111 per barrel in April. While the price of oil softened in June, it quickly spiked over US$92 per barrel last week. Trading Economics data shows crude oil is now trading around US$82 per barrel.
For context, Crude oil was trading around the US$55 level in early January.
And it's not just volatile oil prices and market demand driving the company's shares higher, either.
Woodside grabbed headlines in late April after it posted its first-quarter FY26 update. The oil and gas producer reported a 7% quarter-on-quarter increase in operating revenue and an 8% hike in revenue. The company's production figures were lower thanks to weather events, but this was offset by an 11% increase in the average realised price of oil.
The company also confirmed that its Woodside Scarborough Energy Project is nearing completion and its Trion oil project is 56% complete.
What's next for the oil and gas giant's shares?
If broker forecasts are anything to go by, the experts are divided on the outlook for the Woodside share price over the next 12 months.
Market Index data shows that the majority of brokers hold a buy rating. The $33.59 average share price implies a potential 9% upside ahead, at the time of writing.
Sentiment is a little more mixed on TradingView. Out of 15 analysts, seven have a buy or strong buy rating, and seven have a hold rating. One rates Woodside shares as a sell.
The average share price is a little lower at $32.42, but it still implies a potential 4% upside ahead, at the time of writing. But the range between the minimum and maximum target price is huge. The minimum $24.78 target price implies a potential 20% downside. Meanwhile, some expect the shares could surge 44% to $44.92 over the next 12 months.
Michael Gable from Fairmont Equities recently reduced his rating on this ASX energy share to a hold. He said that the US strategic petroleum reserve was recently at a 43-year low, and he is concerned it will be difficult to keep a lid on crude oil prices.
Last week, Macquarie upgraded Woodside shares to a buy rating with a $32.80 price target. However, at the current trading price, this suggests the stock is close to fully valued.
