Woodside Energy beats profit forecasts as Middle East tensions lift oil prices

Woodside Energy has reported a first-half underlying profit of $1.33 billion, a 7% increase from the previous year, narrowly beating market expectations. The result was driven by a surge in oil prices during the Middle East crisis, which pushed the company's average realised price to $74 per barrel of oil equivalent (boe), up from $61.7 boe a year earlier.

The company said its trading team capitalised on the volatile market by redirecting cargoes to higher-priced destinations and using third-party purchases to meet long-term customer commitments. This "portfolio optimisation" helped capture additional value beyond the direct benefit of higher prices.

Woodside declared an interim dividend of 57 cents per share, up from 53 cents last year. The company also maintained its full-year production guidance of 174 to 185 million barrels of oil equivalent (mmboe) and reaffirmed capital expenditure guidance of $4 billion to $4.50 billion for 2026.

In a separate announcement, CEO Liz Westcott outlined a new cost-saving initiative. "We have set an annual cost savings target of $350 million from 2028 to be delivered through the structured review of our business," she said.

Investors responded positively, with Woodside shares rising as much as 2.1% to A$34.18 in early trading, outperforming the broader S&P/ASX 200 index, which was up 0.2%. Analysts at Citi noted that the new cost-cutting programme and a unified framework for capital allocation decisions could help investors look past a shortfall in operating cash flow.