SYDNEY, March 23, 2026, 04:47 AEDT
Santos enters the new trading week in focus after closing Friday, March 20, down 0.5% at A$7.98, with investors weighing a report that Prime Minister Anthony Albanese asked Treasury to model a tax on windfall gas profits just as energy prices turn higher. 1
Why this matters now is straightforward. Santos sits in Australia’s liquefied natural gas, or LNG, export chain, and any move to capture more of the sector’s upside would land as the value of those exports rises on the back of the Middle East conflict and the closure of the Strait of Hormuz. Australia shipped A$65 billion of LNG last year, Reuters reported, and Asia spot LNG prices have doubled to three-year highs since the U.S. and Israel attacked Iran in February. 2
Reuters market data showed Santos opened at A$8.17 on March 20 and traded as low as about A$7.91 before ending at A$7.98. Peer moves were mixed, which underlined the push and pull between policy risk and commodity strength: Woodside Energy rose 1.0% to A$34.04 and Origin Energy gained 2.1% to A$12.01, while Beach Energy fell 1.2% to A$1.27. 3
The report also puts the Petroleum Resources Rent Tax, Australia’s levy on offshore oil and gas profits, back in play ahead of the federal budget in May. Energy Minister Chris Bowen declined to comment on cabinet deliberations, while industry pushed back hard: Australian Energy Producers chief executive Samantha McCulloch said a retrospective levy would come at the “worst possible time” and add to regulatory uncertainty. 2
That threat hit as crude surged again. Brent settled up 3.26% on Friday at $112.19 a barrel, the highest since July 2022, and IG analyst Tony Sycamore said President Donald Trump’s latest warning to Iran had created a “ticking time bomb” over markets; Energy Aspects founder Amrita Sen said the latest escalation pointed to higher oil prices, not an easy climbdown. 4
For Santos, that leaves a stock tied to both stronger prices and bigger policy risk. In January the company said 2026 production could rise by as much as 30% as Barossa gas feeds Darwin LNG and the Pikka oil project in Alaska nears completion, while Chief Executive Kevin Gallagher said the two projects together should lift output by about 25% to 30% by 2027 from 2024 levels. Citi analyst Tom Wallington wrote then that the first Darwin LNG cargo could “allay investor concerns” that more serious commissioning issues had emerged. 5
Management has also been trying to tighten the cost story. Santos and Beach earlier this month approved the A$357 million Moomba Central Optimisation project, which the company said should deliver more than A$600 million in capital and operating savings over the life of the Cooper Basin’s central fields. Then, in February, after missing annual profit expectations, Santos said it would cut about 10% of staff and review its Australian integrated oil and gas portfolio; Barrenjoey’s Dale Koenders said the review highlighted a resource base the market was scarcely valuing, while Jarden said the planned job cuts should help on operating costs. 6
The catch is that both sides of the Santos trade are moving at once. If Canberra backs away from a windfall levy, the stock has room to lean into firmer oil and LNG prices and the Barossa-Pikka ramp-up. If the tax push hardens, or project execution slips again, the cash-flow upside investors were starting to price in could narrow quickly. 2
