How ASX 200 energy stocks like Woodside and Santos are surging in Monday’s sinking market

S&P/ASX 200 Index (ASX: XJO) energy stocks are jumping higher on Monday even as the broader market is in retreat.

In late morning trade on Monday, the ASX 200 is down 0.4%, while the S&P/ASX 200 Energy Index (ASX: XEJ) is up 2.8%.

Here’s how these leading Australian oil and gas producers are tracking at this same time:

• Woodside Energy Group Ltd (ASX: WDS) shares are up 3.6%
• Santos Ltd (ASX: STO) shares are up 2.7%
• Beach Energy Ltd (ASX: BPT) shares are up 5.6%
• Karoon Energy Ltd (ASX: KAR) shares are up 6.0%

Now, here’s why investors are flocking to the energy sector today.

ASX 200 energy stocks lift off on unsuccessful peace talks

Aussie investors went into the weekend with hopes, albeit faint ones, that peace talks between the US and Iran might lead to a rapid end to the war.

By market open this morning, investors knew that those talks had failed to reach an agreement. Investors also learned that a disappointed President Donald Trump said the US will now implement a blockade on all ships using Iranian ports. That blockade will reportedly commence on Monday night Aussie time.

With the potential loss of some two million barrels a day of Iranian oil that had still be passing through the Strait of Hormuz, global oil and gas prices rocketed on the news, offering a boost to ASX 200 energy stocks like Santos and Woodside shares today.

Brent crude oil is up 7.7% overnight, currently trading back at US$102.54 per barrel.

What are the experts saying?

Commenting on the expected US blockade on vessels using Iranian ports, Mona Yacoubian, director of the Middle East Program at the Center for Strategic and International Studies, said (quoted by Bloomberg):

It strikes me that that is quite an ambitious endeavour, and it doesn’t solve the problem of disruption… Experience suggests that the Iranians will not concede but will respond in kind.

Haris Khurshid, chief investment officer at Karobaar Capital, noted that investors may have been overly optimistic heading into the peace talks, which is pressuring the broader market today while lifting ASX 200 energy stocks.

“The market got ahead of itself on de-escalation,” Khurshid said.

Prior to the blockade announcement, Dionissios Kontos, co-founder of Meyka AI, sounded a moderately positive note.

“The nuance is worth watching,” Kontos said. “Iran’s foreign ministry left the door open for further talks, so this isn’t a full collapse, just prolonged uncertainty.”

How have these ASX 200 energy stocks been tracking?

With the overnight surge in global energy prices, the Brent crude oil price is up 68.5% in 2026.

Here’s how the above four ASX 200 energy stocks have performed year to date (compared to a 2.4% gain posted by the benchmark index):

• Woodside shares are up 45.7%
• Santos shares are up 31.8%
• Beach Energy shares are up 9.6%
• Karoon Energy shares are up 35.6%

The post How ASX 200 energy stocks like Woodside and Santos are surging in Monday’s sinking market appeared first on The Motley Fool Australia.

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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.