Sydney, May 13, 2026, 08:09 AEST
- Woodside climbed alongside gains in oil, rather than on any standalone company-specific driver.
- Lingering concerns over LNG costs and uncertain approval timelines prevented the move from turning decisively bullish.
- Strait of Hormuz recovery projections remain sluggish in traders’ models, keeping the energy premium elevated and adding to broader macro risk.
Woodside Energy Group Ltd picked up 0.75% on Tuesday, closing at A$30.74 after starting the session at A$30.52 and touching A$30.96 at its peak—a move tied to the day’s commodity bid, though project headaches still linger. Santos eked out a 0.53% rise. BHP’s rally signaled resource stocks drawing fresh money.
Oil led the move. Brent finished up 3.42% at $107.77, while WTI jumped 4.19% to $102.18, as optimism for a U.S.-Iran deal fizzled. For producers with a mix of LNG, oil, and condensate, pricier spot energy feeds forward into cash flow—well before those gains appear in earnings reports.
The Strait of Hormuz has shifted from a far-off risk to a real concern for Woodside investors, shaping the price outlook for LNG—liquefied natural gas moved by tanker. As analyst Alex Hodes at StoneX told Reuters, “Markets are doubting that a peace deal is within reach.” The EIA’s latest projection? Hormuz stays effectively closed through late May. Reuters
Bulls have an easy case: Woodside stands out on the ASX as a relatively clean exposure to the energy-price jump. CEO Liz Westcott, during the first-quarter update, pointed to “further benefits of currently higher spot prices” for LNG still to flow through, since contract pricing typically trails spot moves. 2026 production guidance is unchanged at 172–186 million barrels of oil equivalent—that’s gas and oil, all tallied up on the same basis. Woodside
The rally stayed measured. According to a Reuters report on Monday, costs for the long-stalled Browse LNG project have jumped to A$48.7 billion—well above the A$27.3 billion figure from 2019—with the addition of a carbon capture and storage piece. Carbon capture and storage, or CCS for short, involves trapping emissions and pumping them underground.
Bulls might say the cost looks hefty, but this isn’t a marginal asset. According to the Deloitte report Woodside ordered, Browse could generate 3,068 full-time jobs and A$56.2 billion in taxes. Plus, the gas feeds into the North West Shelf LNG facility, now slated to run through 2070.
Bears counter by pointing to timing and capital risk. Browse remains tied up in the approvals process, while Woodside’s hands are full at Scarborough and Louisiana LNG. Even with Brent prices high, a megaproject can still drain cash—especially if regulatory and execution issues stack up.
The policy picture is more complicated. Canberra’s latest domestic gas reservation scheme tells LNG exporters they’ll need to set aside 20% of their output for local buyers starting July 2027. The government says this should help with both supply and prices. But industry players aren’t thrilled—big LNG projects are built around decades-long pricing, not just a few quarters.
Woodside is pushing for rules with more give—something closer to the Western Australia setup, where companies satisfy obligations across a project’s full duration instead of being locked into a rigid yearly benchmark. That’s more than a technical tweak. It can hit project returns, shape what lenders are willing to sign off on, and shift when final investment decisions actually land.
Traders on prediction markets are zeroing in on the odds of oil-related disruption at Hormuz. On Polymarket, bets give just a 9% probability that traffic through the strait is back to normal by the end of May, bumping up to 33% for end-June. Kalshi’s Hormuz contract, running live, puts the figure at about 53% for normalcy before Aug. 1.
There’s also the quality-of-earnings angle to consider. For the first quarter, Woodside’s average realised price landed at $63 per barrel of oil equivalent—an 11% bump from the previous quarter—even though production dropped 8% on seasonal weather. Still, operating revenue climbed 7% to $3.26 billion versus Q4. Management didn’t push a “growth at any cost” message; instead, the focus was on reliability, tight cost control, and a methodical review. Woodside
Stacked up with Santos, Woodside comes off as the bigger player, but with heavier exposure to the global LNG cycle. Compare it with BP, Mitsui, Mitsubishi, and PetroChina’s international arm—its partners in Browse—and the Australian regulatory risk lands squarely on Woodside’s shoulders, plus the operator’s load. WDS isn’t just another oil-linked name; it stands out as the clearest proxy for Australian gas exposure.
Right now, investors are crediting Woodside with a lift from the stronger oil price, rather than banking on the whole Browse play. Shares climbed as improved short-term cash flow caught attention, but gains stayed modest. The next question? Project costs, regulatory hurdles, and just how much of the current energy rally investors will actually price in as lasting.
