Woodside Energy Group Ltd (ASX: WDS) shares are climbing higher again in Wednesday morning trade.
At the time of writing, the shares are up around 0.5% and changing hands at $33.30 a piece. Today's increase means the shares are now up around 41% for the year to date. They're also roughly 27% higher than this time last year.
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What drove Woodside shares higher this year?
So far in 2026, the oil and gas giant has benefited from major oil supply concerns and volatility around conflict in the Middle East.
The US-Iran war shows renewed signs of cooling. But each time it looks like conflict is calming down, it quickly returns. 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 crude oil prices to a multi-year high of around US$111 per barrel in April, according to Trading Economics data. While the price of oil softened in June and early July, it is now trading back up at around US$85 per barrel.
And it's not just volatile oil prices and market demand driving the company's shares higher.
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.
Late last month, the company made waves again after it posted its second-quarter update. Woodside announced a 28% increase in quarterly operating revenue and confirmed that its major growth projects are on track. The Scarborough Energy Project is now 98% complete and remains on budget, targeting first LNG cargo in the December quarter of 2026.
Woodside is expected to release its first-half results for 2026 next week on the 25th of August. Its full FY26 results will be announced in February next year.
Can Woodside shares keep climbing higher?
It looks like brokers now think the oil major's shares are trading around fair value. In fact, some are tipping a downside over the next 12 months.
Market Index data shows the majority of brokers have a hold rating on Woodside shares. The $28.52 average target price implies a potential 14% downside ahead.
Experts on TradingView are a little more positive. Sentiment is split between a hold rating and a buy/strong buy rating. The average $32.31 implies a potential 3% downside, at the time of writing.
The team at Morgans have a hold rating and $32.50 target price on the energy shares. The broker said it was pleased with the company's latest quarterly update, with the figures coming in ahead of expectations.
Michael Gable from Fairmont Equities recently reduced his rating on Woodside shares 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.
