Woodside Energy Group Ltd (ASX: WDS) shares have fallen around 5% in early morning trade on Thursday.
At the time of writing, the shares are trading at $30.78 apiece.
The petroleum company's shares have slumped around 7% so far in November, but it's barely dented gains from a strong rally earlier this year.
Woodside shares are still up 30% so far in 2026, and are 23% higher than 12 months ago.
Image source: Getty Images
Why are Woodside shares falling today?
The company made a 2026 Capital Markets Day announcement earlier this morning, detailing plans to sharpen operation and product execution and maximise value from its global LNG portfolio.
The company also announced a change in how its dividends are calculated, which changes the minimum amount for its payouts.
Woodside announced a new distribution policy of 20–40% of adjusted operating cash flows. The company said it will prioritise 20% of adjusted operating cash flow as a base dividend, with up to another 20% available for additional dividends and/or buybacks.
Woodside CEO and Managing Director Liz Westcott:
"We are targeting portfolio return on average capital employed of 12–15% by the mid-2030s. Delivery of our committed projects, the structural cost program, active portfolio management and increased value capture through marketing and trading will support this improvement."
Woodside historically paid out 50% to 80% of its net profit.
Oil price declines are also creating headwinds
The key driver behind Woodside's share price increase this year has been conflict in the Middle East and its impact on global fuel supply and prices.
The company's overall revenue comes from a mix of LNG (liquefied natural gas), pipeline gas, and liquids.
But its LNG business is the most dominant segment of its business, accounting for around 80% of its overall energy production. And roughly 70% of the company's LNG portfolio is tied to oil-linked contracts.
That means its share price is heavily influenced by shifts in global oil prices. When the oil price rallies, its shares climb higher, and when the oil price slumps, Woodside shares also decline.
According to Trading Economics data, crude oil has cooled around 8% to around US$88 per barrel on Wednesday, extending losses for the third day in a row and hitting a one-month low.
Markets are pricing in an end to the Iran war after the White House linked Republicans' midterm election defeat to the war.
Buy, sell, or hold: Here's what the experts think
It looks like Woodside shares are now trading around fair value.
TradingView data shows that, out of 18 analysts, six have a buy/strong buy rating. Another 10 have a hold rating, and two rate the stock as a sell.
The average $33.90 target price implies a potential 10% upside, at the time of writing.
But there is still some potential that Woodside shares could rally to a new annual high in coming months.
The maximum $43.68 target price implies a potential 42% upside ahead, at the time of writing.
That's around 22% higher than the $35.80 annual high we saw in April. Woodside shares haven't traded around the $43-mark since mid-2011.
My take
I think it'll be some time yet before we see a resolution to conflict in the Middle East. This isn't the first time it has looked like a peace agreement is on the table. And each time oil prices cool, they quickly spike back up again.
Middle Eastern crude exports have reportedly recovered to close to pre-war levels. But the area is still highly volatile and any escalation in conflict could further disrupt regional energy supplies and put pressure on prices yet again.
This is good news for ASX energy shares like Woodside. If oil bounces back up close to US$100 a barrel, Woodside will benefit from higher realised prices.
