The Santos Ltd (ASX: STO) share price has jumped higher in Wednesday afternoon trade.
At the time of writing, the shares are up around 2% for the day, at a 12-year high of $9.04 a piece.
Today’s increase follows four consecutive days of share price gains. The shares are now up around 6% over the past week alone, and have rallied 47% for the year to date.
What has driven such strong share price gains for Santos this year?
ASX energy shares have flown higher in 2026 as ongoing geopolitical tensions in the Middle East push oil prices close to record highs.
Continued disruptions to the movement of oil out of the region pushed global oil prices above US$110 a barrel earlier this year, and after a brief drop around July, renewed conflict has seen oil prices surge again in October.
Santos directly benefits from high oil prices because it lifts both its revenue and profit margin.
The share price rally has also been supported by Santos’ strong half-year FY26 results announcement in August.
The major ASX oil and gas giant reported a 2% year-on-year increase in sales revenue and a 1.7% increase in production volumes. The company also generated free cash flow from operations, driven by strong base business performance.
Why is the share price spiking again this week?
There isn’t any company specific price-sensitive news this week to explain the latest Santos share price rally.
The latest increase is mostly likely a result of another strong rebound in oil prices this week.
Trading Economics data shows that crude oil climbed above US$95 per barrel today, marking its fifth consecutive session of gains. Escalating conflict between Iran and Saudi Arabia this week has caused even more oil supply disruptions and tankers transiting the Strait of Hormuz are being targeted.
Crude oil prices are now 63% higher than just 12 months ago.
Are the shares a buy, sell, or hold?
The data on Market Index was updated just yesterday, and it still shows that even after the latest rally, brokers are still very positive on Santos shares.
All brokers have a strong buy rating. Although the average target price of $9.04 is exactly flat on where the shares are trading at the time of writing.
The data on TradingView shows a little more insight. The majority (14 out of 17) of analysts have a buy/strong buy rating on the shares. But the average $9.24 target price implies around a 2% upside ahead, at the time of writing.
But the range between the minimum and maximum is huge. Some think the shares have the potential to jump another 22% to $11 over the next 12 months. But others think the Santos share price could sink 22% to $7.07.
My view on the Santos share price
Oil price volatility aside, I think Santos still presents great growth potential over the next 12 months.
The oil and gas major is in the process of transitioning from a period of heavy capital expenditure to active production. It is heavily reliant on two massive multi-billion dollar developments, including its Barossa LNG Project in the Northern Territory and its Pikka Phase 1 Project in Alaska.
Continuous production at Pikka commenced in June and it is fast progressing to full production. Just last month, Santos announced that it had successfully started seawater injection at its Nanushuk Drillsite-B (NDB) within the project.
Santos expects its second-half FY26 production to be 20% to 30% higher than the first half, and the ramp-up production at Pikka could certainly help that goal be achieved (or even exceeded).
The post Santos share price jumps to fresh multi-year high: Here's what brokers tip next appeared first on The Motley Fool Australia.
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- 5 things to watch on the ASX 200 on Thursday
Motley Fool contributor Samantha Menzies 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.