ASX 200 energy shares in retreat as oil price plunges on unexpected developments

ASX 200 energy stocks are catching headwinds on some unexpected fronts today.

| More on:
Oil price going down.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

S&P/ASX 200 Index (ASX: XJO) energy shares are taking a tumble today amid a big overnight fall in global oil prices.

The ASX 200 itself is down 0.9% in early afternoon trade on Tuesday.

The benchmark Aussie index is following the lead of United States markets, where the S&P 500 Index (SP: .INX) closed down 1.8% overnight as President Donald Trump presses ahead with instituting steep tariffs on exports from Canada, Mexico, and China.

But ASX oil and gas stocks are trailing the benchmark performance, with the S&P/ASX 200 Energy Index (ASX: XEJ) down a sharp 2.2% at this same time.

Here's how these top four ASX 200 energy shares are tracking today:

  • Woodside Energy Group Ltd (ASX: WDS) shares are down 1.9% at $24.77
  • Santos Ltd (ASX: STO) shares are down 2.6% at $6.49
  • Beach Energy Ltd (ASX: BPT) shares are down 2.0% at $1.41
  • Karoon Energy Ltd (ASX: KAR) shares are down 2.7% at $1.53

So, what's happening?

ASX 200 energy shares catching multiple headwinds

Oil prices and ASX 200 energy shares are catching headwinds on several fronts today.

First, investors are concerned that the new US tariffs mentioned up top could crimp global economic growth and reduce global oil demand in the year ahead.

The oil price also got hit from the latest batch of jobs, spending, and manufacturing data out of the US, all of which point to slowing growth in the world's top economy.

And perhaps the biggest, and widely unexpected development, was the announcement by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) that its members will begin to increase oil production commencing in April.

Many analysts had been forecasting another cut from the cartel in 2025 to support the oil price, or at the least, seeing OPEC+ maintaining its current production limits. But, with Trump pressing for lower energy prices, Bloomberg reported that the cartel will begin to gradually restore 2.2 million barrels per day of production by 2026.

"This gradual increase may be paused or reversed subject to market conditions. This flexibility will allow the group to continue to support oil market stability," OPEC+ stated.

"The optics around any reinstatement of supply, even if incremental and small, will be seen as price-negative," Harry Tchilinguirian, head of oil research at Onyx Commodities, said (quoted by Bloomberg).

The more than 2% fall in Brent crude oil following this news is seeing investors bid down ASX 200 energy shares today.

Brent crude is currently trading for US$71.62 per barrel, down from US$82.03 per barrel on 15 January.

And with Trump taking a decidedly softer tone on Russia than the previous administration, it's not out of the question that we'll see sanctions on Russian oil exports eased in the year ahead.

Motley Fool contributor Bernd Struben 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.

More on Energy Shares

Worker on a laptop at an oil and gas pipeline.
Energy Shares

Woodside share price charging higher on North West Shelf approval

Woodside has been working more than six years to gain an extension for its North West Shelf gas project.

Read more »

Gas and oil plant with a inspector in the background.
Energy Shares

Does Macquarie rate Origin Energy shares a buy, hold or sell?

The broker has given its verdict on the energy giant. Let's see what it is saying.

Read more »

An oil worker in front of a pumpjack using a tablet PC.
Energy Shares

Ord Minnett tips Woodside shares to rise 15%+

Market-beating returns could be on offer from this energy giant.

Read more »

Workers inspecting a gas pipeline.
Energy Shares

Woodside share price lifts amid pending $25 billion project extension decision

Woodside shares are pushing higher ahead of a vital government project determination.

Read more »

gas burner alight on a stove
Energy Shares

What does Macquarie think AGL shares are worth?

How bullish is Macquarie on this major energy player?

Read more »

A man in a suit face palms at the downturn happening with shares today.
Energy Shares

Why is the Origin Energy share price sinking 4% today?

Let's find out why investors are hitting the sell button on Monday.

Read more »

A woman holds her finger to the side of her lips in contemplation as she looks upwards to an array of graphic images of light bulbs above her head, one of which is on and glowing.
Energy Shares

Do brokers think the AGL share price is a buy?

Are AGL shares a good investment right now?

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Energy Shares

With the 8% dividend yield, is the Woodside share price a buy?

Can investors get energised about this stock’s passive income potential?

Read more »