If the oil price remains above US$100, Woodside shares could be raining dividends before Christmas

Woodside Energy Group Ltd (ASX: WDS) shares have been on fire in 2026.

In early afternoon trade today, shares in the S&P/ASX 200 Index (ASX: XJO) energy stock are down 0.2%, trading for $31.66 apiece.

Despite that minor dip, Woodside shares remain up a whopping 34.2% since the closing bell sounded on 31 December.

For some context, the ASX 200 is down 1.5% year to date.

Taking a step back, shares in the ASX 200 oil and gas stock are up 38.8% since this time last year.

And that doesn’t include the $1.653 in fully-franked dividends the company paid (or shortly will pay) eligible stockholders over the year. At the current share price, this sees Woodside trading on a fully-franked trailing dividend yield of 5.2%.

But passive income investors could see a significantly juicier dividend yield from the company’s next interim dividend payout. Woodside should be paying its interim dividend in late September or early October, in plenty of time to help pay for those Christmas presents.

Here’s what’s happening.

Woodside shares surging alongside global oil prices

On 31 December, a barrel of Brent crude oil was trading for US$60.85, according to data from Bloomberg.

Today, as the United States and Israeli war with Iran continues to disrupt global oil markets, that same barrel is fetching US$102.97. This sees the oil price up a blistering 69.2% in 2026. And it’s seen investors piling into Woodside shares amid expectations of higher profits and dividends to come.

Now, we’re fervently hoping that the Middle East conflict ends sooner rather than later. An acceptable resolution should see oil prices come back down. There’s no shortage of oil, after all, just a shortage of safe shipping routes.

But if the conflict does drag on, and the oil price remains near or above US$100 per barrel, investors could see a return to the supersized dividends delivered by Woodside shares in 2022 and early 2023.

As you may recall, following Russia’s invasion of Ukraine in early 2022, the Brent crude oil price rocketed to US$118 per barrel in March of that year, with oil topping US$122 per barrel in June. The oil price remained above US$100 per barrel through August 2022. And it led to outsized profits for ASX 200 energy stocks like Woodside.

And the company wasn’t stingy when it came to sharing the wealth.

On 10 October 2022, Woodside paid a fully-franked interim dividend of $1.60 a share. The company then paid an all-time high final dividend of $2.154 a share on 5 April 2023.

That equates to a full-year payout of $3.754 a share.

At the current Woodside share price, that would equate to a fully-franked yield of 11.9%.

Or more than twice the actual trailing dividend yield Woodside stock is currently trading on.

But then that yield is based on the far lower oil and gas prices the company received in 2025.

Should the oil price remain above US$100 per barrel for much of this year, passive income investors may well see that yield approach the levels they enjoyed three years ago.

The post If the oil price remains above US$100, Woodside shares could be raining dividends before Christmas appeared first on The Motley Fool Australia.

More reading

• Why Lifestyle Communities, Perpetual, Reliance Worldwide, and Woodside shares are rising today
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• Here’s why ASX 200 energy shares were the only risers last week
• Oil surges 10% overnight. Here are 2 ASX 200 stocks to watch today
• 5 things to watch on the ASX 200 on Friday

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.