Against a backdrop of escalating global geopolitical turmoil and local operational disruptions, Australia’s biggest energy producer Woodside Energy has defied market expectations to deliver a surprising uptick in revenue for the March quarter, new corporate disclosures show.
In its mandatory filing to the Australian Securities Exchange (ASX) this week, Woodside reported that operating revenue for the three months ending March 31 climbed 7% quarter-over-quarter to hit US$3.26 billion (equivalent to AU$4.54 billion). The company’s average selling price for its full product portfolio — including natural gas, liquid oil, and ammonia — jumped 11% to US$63 per barrel of oil equivalent, or AU$87.67.
This quarterly gain follows a US$3.035 billion (AU$4.22 billion) revenue result in the final quarter of 2023, though the latest figure still comes in slightly below the US$3.315 billion (AU$4.61 billion) revenue Woodside recorded in the same period a year earlier.
The impressive price growth driven by international market shifts was partially offset by an 8% drop in overall production during the quarter, caused by severe operational shutdowns triggered by Tropical Cyclone Narelle that hit Woodside’s Western Australian upstream assets. Even with the production decline, markets reacted positively to the earnings release almost immediately: Woodside’s share price rose 1.64% in immediate after-announcement trading to settle at AU$32.93 per share.
The price surge that boosted Woodside’s top line traces directly to escalating conflict between the United States and Iran, which disrupted traffic through the Strait of Hormuz — the narrow 50-kilometer maritime chokepoint that links the Persian Gulf to the Arabian Sea. Before the outbreak of recent hostilities, nearly 20% of the world’s total oil and liquefied natural gas (LNG) supplies passed through the strategic waterway. When conflict halted commercial traffic and raised widespread fears of widespread supply shortages across Asian and European markets, global crude and LNG prices spiked sharply.
Woodside chief executive Liz Westcott framed the quarterly result as a modest but solid portfolio performance shaped directly by the market upheaval from the Middle East conflict. She noted that additional gains from current elevated spot prices will flow through to future quarterly results for the company’s LNG segment, due to the structure of its tagged contract pricing that links contract prices to delayed spot market benchmarks.
Westcott confirmed that the Middle East conflict has not caused any disruptions to Woodside’s own global trading operations, with all the company’s scheduled shipping movements continuing to operate according to plan. She also expanded on the impact of the Western Australian cyclone, crediting the company’s emergency response team for protecting staff, physical assets, and the surrounding environment during the mandatory shutdown and subsequent restoration of production activities.
Looking ahead, Westcott said Woodside will sharpen its focus on organizational efficiency and enhanced capital management, seeking to strike a careful balance between funding ongoing growth projects and delivering solid returns to shareholders. “Cost discipline is essential to sustained shareholder value creation,” she said. “We are commencing a structured review of our business to streamline decision making, reduce complexity and improve accountability.”