Woodside Energy Group Ltd (ASX: WDS) shares have been on a tear this year.
In morning trade today, shares in the S&P/ASX 200 Index (ASX: XJO) energy stock are up 0.5%, changing hands for $33.33 apiece. That sees the share price up an impressive 40.2% in 2026.
For some context, the ASX 200 is down 0.4% today and up 3.5% year to date.
Atop the strong Woodside share price gains this year, the company also paid out a fully-franked 83.5 cent per share final dividend on 27 March.
But with the share price having surged more than 40% already this year, is the ASX 200 energy stock still a good buy for passive income?
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Should I buy Woodside shares for passive income?
It goes without saying that investors who bought Woodside shares at the 2 January close of $23.66 will be enjoying a higher dividend yield than investors who buy the stock today.
Taking a look at the trailing yield, atop the 83.5 cent per share dividend the company paid in March, Woodside also paid out a fully-franked 81.8 cent per share dividend on 24 September.
That works out to a full-year passive income payout of $1.653 per share.
So, if you'd bought the stock at the beginning of the year, you'd be earning a fully-franked 7% trailing dividend yield on that investment. Or a 10% grossed-up yield, taking those franking credits into account.
At today's $33.33, the dividend yield from Woodside shares is a more modest, but still attractive, 5%. Or 7.1% grossed up.
Based on the trailing yield, then, if you invested $10,000 in Woodside shares today, you could expect to earn $496 a year in passive income. And, of course, we'll be hoping for more capital gains as well.
Could the ASX 200 energy stock's passive income payouts increase?
2022 and 2023 saw Woodside shares delivering record dividend payments, and attracting strong interest from passive income investors, amid soaring global oil and gas prices.
While oil prices haven't quite matched those levels yet in 2026, they've come close amid the ongoing conflict in the Middle East and closure of the vital Strait of Hormuz shipping lane. Brent crude oil is currently trading just north of US$91 per barrel, according to data from Bloomberg.
Indeed, at Woodside's June quarter report, the company reported that despite a 9% quarter-on-quarter production slip (primarily related to planned maintenance and inclement weather), operating revenue for the quarter surged 28% to US$4.19 billion.
That revenue boost was largely thanks to the 35% increase in the average realised price to US$85 per barrel of oil equivalent the company received over the three months.
While there are no guarantees, I suspect that higher oil prices, and forecast full-year production in the range of 174 MMboe to 185 MMboe, will result in a higher interim dividend being declared when Woodside reports on its half-year results next week, 25 August.
