Hi Debbie,
Energy stocks are a natural hedge during geopolitical shocks, but their valuations usually assume a much lower long-term oil price than the crisis spike. When the conflict risk fades, oil and the stocks often retrace, which is why we prefer taking some profit into sharp rallies rather than chasing them. However, not all companies/stocks are made equal:
Woodside (WDS) – The ASX’s most recognised energy stock has tracked oil prices closely over recent years. WDS has rallied ~33% over the last 12-months having steadily accelerated for most of 2026 before popping in the last fortnight. To put the numbers into perspective the last time oil was trading $95-100 area was in September 2023 when WDS reached $33 – not that different to this month.
- If we had a WDS position we would be looking to take part profit.
Santos (STO) – STO has lagged WDS over the last 12-months, current trading up 22%. To again put the numbers into perspective, in September 2023 STO reached $8, again not that different to this month.
- If we had a STO position we would be looking to take part profit.
Beach Energy (BPT) -This $2.7bn oil & gas player has been a large disappointment over the last 12-months, its actually slightly down even after recent Middle East conflict. We have been consistently negative on BPT over the years given the complexity in their operations – that view has not changed.
- We see no reason to own BPT.
