Oil and fuel are key vitality fuels, and ASX-listed Australian oil and fuel firms may benefit from their worth strikes.
For essentially the most half, 2024 was a risky 12 months for each the oil and fuel markets. Within the first half of the 12 months, oil costs have been driving an uptrend, spurred on by rising tensions within the Center East amid tightening provide.
Nonetheless, after costs peaked at US$91.70 per barrel in early April, demand-side challenges weighed oil down, with ranges sinking to US$77 in early June. Within the second half of the 12 months, oil costs took successful as world financial uncertainties continued to develop.
By September 10, oil fell to a year-to-date low of US$69.09 as traders anticipated rate of interest cuts within the US and the Israel-Hamas battle continued to threaten provide chains. Weak point in demand from China additionally suppressed oil costs. By late December, costs have been holding within the US$72.40 vary.
In the meantime, pure fuel costs skilled a sharp six month decline beginning in November 2023. The autumn got here on the again of a shift in mature markets, together with the Asia Pacific area, Europe and North America, that are experiencing reductions in fuel demand as they search alternate options like renewables and pursue improved vitality effectivity.
In mid-2024, pure fuel costs surged to US$3.12 per million British thermal items based mostly on elevated demand throughout above-normal temperatures, however they pulled again within the third quarter to under US$2. Nonetheless, seasonal demand amidst colder climate pushed pure fuel costs up within the fourth quarter to flirt with the US$4 degree in late December.
The oil and fuel outlook for 2025 is for each these commodities to proceed dealing with market volatility as geopolitical and world financial uncertainties persist. And, after all, Donald Trump’s presidency within the US will seemingly throw the market just a few curveballs. Nonetheless, analysts stay assured within the resiliency of this sector.
For traders trying to enter the oil and fuel sector, what’s the easiest way to get publicity on the ASX? Studying in regards to the largest ASX oil and fuel firms by market cap is an effective place to begin. Knowledge for the ASX oil shares checklist under was obtained on January 6, 2025, utilizing TradingView’s inventory screener. All market cap and share worth information was correct at the moment.
1. Woodside Power Group (ASX:WDS)
Market cap: AU$47.8 billion
Share worth: AU$25.49
As the most important ASX-listed oil and fuel inventory by market cap, Woodside Power Group leads the nation in pure fuel manufacturing and is taken into account a pioneer in Australia’s liquefied pure fuel (LNG) business.
In June 2022, Woodside Petroleum merged with BHP’s (ASX:BHP,NYSE:BHP,LSE:BHP) oil and fuel enterprise to kind Woodside Power Group. The brand new firm’s pure fuel manufacturing accounts for five % of worldwide LNG provide.
The corporate reported in June 2024 that it had achieved first manufacturing on the Sangomar undertaking in Senegal, the nation’s first offshore oil undertaking. Its standalone floating manufacturing storage and offloading facility has a nameplate capability of 100,000 barrels per day. Woodside continued ramping up manufacturing all year long, reporting file output ranges within the third quarter.
With its expanded portfolio, Woodside achieved a web revenue after tax of US$1.9 billion for the first half of 2024, together with free cashflow of US$740 million.
Extra just lately, in December 2024 Woodside agreed to an asset swap with Chevron’s (NYSE:CVX) oblique subsidiary Chevron Australia that’s anticipated to shut in 2026, “topic to the completion of Julimar Section 3 Undertaking execution and handover.”
Below the settlement, Woodside would purchase Chevron Australia’s curiosity in a number of initiatives in Western Australia by which Woodside already holds curiosity, particularly the North West Shelf undertaking, the North West Shelf oil undertaking and the Angel carbon seize and storage undertaking. These would deliver Woodside’s pursuits to 50 %, 66.7 % and 40 % respectively. Chevron Australia can even pay Woodside as much as US$400 million reliant on sure milestones.
In alternate, Chevron would obtain Woodside’s 13 % non-operating curiosity within the Wheatstone undertaking and 65 % working curiosity within the Julimar-Brunello undertaking.
Market cap: AU$22.29 billion
Share worth: AU$6.86
Australian vitality firm Santos is the operator of a number of joint ventures with important LNG manufacturing, together with the Papua New Guineau LNG undertaking and the Gladstone LNG undertaking in Queensland, Australia. The corporate provides its merchandise to markets situated throughout Australia and Asia.
In February 2022, Santos partnered with SK E&S and others on carbon seize and storage initiatives in Australia.
In Could 2024, the corporate secured a binding 10 12 months LNG provide and buy settlement with Japan’s Hokkaido Fuel Co. (TSE:9534) for about 400,000 tonnes of LNG per 12 months beginning in 2027. The corporate ended the 12 months with the signing of a long-term LNG provide contract with Japanese utility firm Shizouka Fuel.
In its report for the first half of 2024, Santos highlighted mixed free cashflow of US$1.07 billion and gross sales income of US$2.71 billion for the primary two quarters. For its third quarter, the corporate reported free cashflow of roughly US$400 million, and gross sales income of US$1.3 billion.
Together with its three way partnership companions ExxonMobil (NYSE:XOM), Kumul Petroleum Holdings, Mineral Assets Improvement Firm and JX Nippon, Santos introduced the Angore LNG undertaking, a part of Papua New Guineau LNG, into manufacturing in November 2024.
3. Viva Power Australia (ASX:VEA)
Market cap: AU$4.36 billion
Share worth: AU$2.68
Viva Power Australia owns the Geelong oil refinery and distributes Shell (NYSE:SHEL,LSE:SHEL) fuels all through Australia. The agency oversees an enormous community of over 1,300 Shell and Liberty service stations nationwide.
In its H1 2024 working replace, Viva Power highlighted that its business and industrial section delivered a file half 12 months in gross sales volumes, up by 9 % over the identical interval in 2023. The corporate attributed the expansion to sturdy demand from the aviation, useful resource and agriculture sectors, together with new enterprise secured final 12 months, together with the Australian Defence Power.
Viva’s third quarter 2024 replace highlighted complete group gross sales volumes of 4.16 billion litres, up 3 % in comparison with the identical quarter within the earlier 12 months.
Market cap: AU$3.27 billion
Share worth: AU$1.42
Oil and fuel exploration and manufacturing firm Seaside Power has a various portfolio, with onshore and offshore oil and fuel manufacturing in 5 basins throughout Australia and New Zealand.
In 2023, the corporate made fuel discoveries at each Tarantula Deep 1 and Trigg Northwest 1 as a part of its ongoing Perth Basin fuel exploration marketing campaign. Throughout its 2024 fiscal 12 months, Seaside Power posted AU$1.8 billion in gross sales income, up 9 % year-on-year. The rise got here regardless of a 7 % lower in manufacturing to 18.2 million barrels of oil; in accordance with the agency, the decline was primarily attributable to decrease buyer fuel nominations.
Wanting forward, Seaside Power is concentrating on early within the 2025 calendar 12 months for first fuel manufacturing at its Waitsia fuel plant, which is at the moment underneath development.
Market cap: AU$1.1 billion
Share worth: AU$1.44
Karoon Power is targeted on continued firm development via a broad pipeline of exploration and growth initiatives in Brazil, together with its producing Baúna and Piracaba oil fields.
In December 2023, Karoon accomplished its acquisition of pursuits within the US Gulf of Mexico from LLOG, together with a 30 % working curiosity within the Who Dat and Dome Patrol oil and fuel fields and related infrastructure, in addition to a virtually 16 % working curiosity within the Abilene area and ranging pursuits in adjoining exploration acreage.
In its H1 2024 report, Karoon outlined manufacturing of 5.08 million barrels of oil equal, down 7 % over the earlier half 12 months, in addition to gross sales income of US$409.4 million for the interval.
For the third quarter 2024, Karoon reported a 25 % enhance in manufacturing over the second quarter to 2.68 million barrels of oil equal. Gross sales income for the quarter got here in at US$144.9 million, down 32 % from the prior quarter. This was largely attributable to decrease gross sales volumes brought on by the timing of liftings and realised oil costs 8 % decrease than Q2.
FAQs for oil and fuel investing
What’s crude oil?
Crude oil is a mix of hydrocarbons in liquid kind that’s present in pure underground reservoirs within the Earth’s crust. This petroleum liquid is refined to provide a wide range of vitality and industrial merchandise, together with asphalt, diesel and jet fuels, gasoline, heating oils, lubricants and propane.
Does Australia have oil?
Geoscience Australia states that Australia hosts about 0.3 % of worldwide oil reserves.
“Most of Australia’s recognized remaining oil assets are condensate and liquefied petroleum fuel related to big offshore fuel fields within the Browse, Carnarvon and Bonaparte basins,” in accordance with the federal government company.
The place does Australia get its oil?
Along with producing it domestically, Australia receives oil imports from Singapore, South Korea, China, Malaysia and India, as a result of Australia’s home oil manufacturing doesn’t cowl its oil consumption.
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Securities Disclosure: I, Melissa Pistilli, maintain no direct funding curiosity in any firm talked about on this article.
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