Woodside (ASX:WDS) Share Price and Energy Markets: Oil, LNG and the Middle East

Sonal Goyal

04 November 2026 10:49 PM AEDT

Woodside (ASX:WDS) Share Price and Energy Markets: Oil, LNG and the Middle East

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Key Highlights

Brent averaged US$97 a barrel in the September quarter as crude disruptions eased.
Lagging oil-linked contracts and gas hub prices lifted the realised LNG price to US$84/boe.
Hedge settlements and an embedded derivative reduced the profit benefit from higher prices.
Energy price exposure remains central to the company's earnings.

Woodside Energy Group Ltd (ASX:WDS) earns most of its Revenue from selling LNG, oil and condensate into global markets, which means Commodity benchmarks and geopolitical events are among the most direct influences on the Woodside share price. The company's Third Quarter Report for the period ended 30 September 2026 shows how those forces played out: Brent Crude eased, Asian LNG prices remained elevated, and contract price lags pushed Woodside's realised LNG price up 27 per cent on the June quarter. Meanwhile, the Reserve Bank of Australia (RBA) has identified fuel prices linked to the Middle East conflict as a Factor adding to domestic inflation.

Oil Prices Eased in the September Quarter

Dated Brent averaged US$97 per barrel in the September quarter, down from US$105 in the June quarter, according to Woodside's report. The company explained that "the impact of crude Supply disruptions softened during the quarter as export flows recovered and market balances improved".

That shift fed directly into Woodside's liquids business. Realised prices for oil, condensate and Natural Gas liquids fell during the quarter, reflecting lower crude benchmarks and reduced realised premiums. Liquids production was also lower, averaging 202 thousand barrels per day, down 6 per cent on the June quarter, partly because of natural decline and lower production sharing entitlement at Sangomar in Senegal.

The company's forward-looking statements list "the ongoing conflicts in Ukraine and in the Middle East" among factors that may affect oil and gas supply and demand, signalling that geopolitical risk remains part of the outlook for the company.

Why LNG Prices Rose While Oil Fell

Many long-term LNG contracts in Asia are priced against oil using a time lag. Woodside's report shows the Japan Customs-cleared Crude price, lagged by three months, averaged US$111 per barrel in the September quarter compared with US$67 in the June quarter. In other words, higher crude prices earlier in the year were feeding through to LNG contract prices just as spot crude was easing.

Woodside's realised LNG price rose to US$84 per Barrel of Oil Equivalent (boe), from US$66/boe in the June quarter. The company attributed the increase to price lags from the June quarter, portfolio optimisation in that earlier quarter and higher gas hub pricing in the lead up to the northern hemisphere winter.

Across the whole portfolio, the average realised price was US$84/boe, little changed from US$85/boe in the June quarter, as higher LNG prices offset softer liquids prices.

Volumes moved in the same direction as LNG prices. Gas production averaged 1,697 million standard cubic feet per day, up 28 per cent on the June quarter, and total production rose 12 per cent to 46.2 million barrels of oil equivalent. Combined with the higher LNG price, that lifted Operating Revenue to US$4,281 million, 2 per cent above the June quarter, despite the softer oil benchmark.

Gas Hub Exposure

Not all LNG is sold on oil-linked terms. Woodside said about 33 per cent of the LNG it sold in the September quarter was linked to gas hub indices, and its 2026 guidance assumes gas hub exposure of about 30 per cent.

In the quarter, the Japan Korea Marker averaged US$18.9 per million British thermal units and the Dutch TTF benchmark US$18.0. These spot and hub prices respond quickly to weather, storage levels and supply disruptions, so they introduce a more immediate link between global events and Woodside's revenue than oil-linked contracts with built-in lags.

As Scarborough begins production, targeted for the December quarter, the Volume of LNG Woodside sells will increase, which is likely to make both oil-linked and hub-linked pricing more significant for group revenue.

Hedging and Embedded Derivatives

Woodside uses hedging to manage price exposure, and those positions have had a measurable effect in 2026. The company reported that hedge settlements over the year to date resulted in a net cash outflow of about US$565 million and a pre-tax profit reduction of US$519 million. It also expects to recognise a year-to-date unrealised pre-tax loss of about US$179 million on an embedded derivative in the Perdaman gas supply contract.

Hedging can reduce the benefit of higher prices as well as cushion lower ones. For investors, these items explain why changes in benchmark prices do not always translate one-for-one into reported earnings.

The Domestic Angle

Higher energy prices also have effects within Australia. In its 3 November 2026 statement, the RBA Monetary Policy Board said higher fuel and commodity prices linked to the Middle East conflict were adding to inflation, and it raised the cash rate target by 25 basis points to 4.85 per cent. The Board said Inflation is expected to remain above 3 per cent for the coming year.

Woodside also supplies the domestic market. During the September quarter it agreed pipeline gas sales of 12.9 petajoules (PJ) to Western Australian customers for supply between 2027 and 2029, and 18.4PJ to East Coast customers for supply between 2026 and 2028.

Exchange Rates and Reporting

Woodside reports its results in US dollars, the currency in which oil and LNG are priced internationally. Its dividends are determined in US cents per share and paid to most Australian shareholders in Australian dollars. Movements in the AUD:USD Exchange Rate therefore affect how Woodside's US dollar Earnings translate for local investors, separately from movements in commodity prices.

Key Takeaways

Woodside's September quarter illustrates the different ways global energy markets reach its earnings. Brent fell to an average of US$97 a barrel as crude disruptions eased, but lagged oil-linked contracts and gas hub prices lifted the realised LNG price to US$84/boe. Hedge settlements and an embedded derivative have reduced the profit benefit from higher prices this year. For those following the Woodside share price, the drivers to monitor are Brent and Japan Customs-cleared Crude trends, Asian and European gas hub prices through the northern winter, developments in the Middle East, the start of Scarborough LNG sales and the AUD:USD exchange rate.

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