Why ASX 200 energy stocks like Santos and Woodside shares are ending the week with a bang

S&P/ASX 200 Index (ASX: XJO) energy stocks are enjoying a strong end to the week, and indeed a strong start to 2026.

During the Friday lunch hour, the ASX 200 is up 0.2%. This sees the benchmark index up a healthy 2.4% in the new year.

Here’s how the big four ASX 200 energy stocks stack up:

• Woodside Energy Group Ltd (ASX: WDS) shares are up 1% today and up 7.3% year to date
• Santos Ltd (ASX: STO) shares are up 2.9% today and up 14.7% year to date
• Beach Energy Ltd (ASX: BPT) shares are up 2.1% today and up 6.2% year to date
• Karoon Energy Ltd (ASX: KAR) shares are up 3.3% today and up 13.5% year to date

Here’s what’s driving the outperformance.

ASX 200 energy stocks buoyed by rising global oil prices

Many analysts had been advising investors in ASX 200 energy stocks like Woodside and Santos to expect ongoing weakness in global oil prices in 2026. Those forecasts are based on supply growth outpacing demand growth.

But the early days of the new year aren’t quite playing out that way.

International benchmark Brent crude oil prices leapt 3.4% overnight to currently be trading for US$70.71 per barrel. That’s the highest oil price since July. And it sees the Brent crude oil price up 16.2% in 2026.

Much of these gains look to be linked to increasing sabre rattling from United States President Donald Trump.

Indeed, oil prices have taken a sharp turn higher after Trump threatened to attack Iran if the nation doesn’t make a deal on its nuclear ambitions.

US warships are steaming to the region, leading to fears of military conflict, and that Iran may retaliate by shutting down the Strait of Hormuz. It’s far from the first time Iran has threatened to disrupt the vital, narrow shipping passage, with previous historic disruptions also sending global oil prices soaring.

Commenting on the geopolitical tensions impacting global oil markets, and by connection ASX 200 energy stocks like Santos and Woodside, Citigroup analyst Anthony Yuen said (quoted by Bloomberg):

The potential for Iran getting hit has escalated the geopolitical premium of oil prices by potentially US$3 to US$4 a barrel. Oil prices can stay more elevated than many had expected, despite markets starting the year anticipating large oversupply.

What’s the latest on Woodside shares?

Woodside shares closed up 2.7% on Wednesday after the company released its December quarter results.

The ASX 200 energy stock reported record production for the full 2025 calendar year of 198.8 million barrels of oil equivalent (MMboe). Investors reacted positively, with production exceeding Woodside’s full-year guidance of 192 to197 MMboe.

Woodside reported full-year revenue of US$12.98 billion.

The post Why ASX 200 energy stocks like Santos and Woodside shares are ending the week with a bang appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 stocks smashing the benchmark this week
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Woodside shares storm higher on record production

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.