Woodside revenue surges 30% as Iran war boosts Australian LNG

Australia's largest oil and gas producer, Woodside Energy, posted a nearly 30% jump in quarterly revenue to $6 billion, emerging as one of the biggest corporate winners from the ongoing war in the Middle East. The surge, reported Wednesday, underscores how the conflict—which has crippled liquefied natural gas (LNG) exports from the Persian Gulf—is funneling massive profits to producers outside the region.

The Iran Conflict and LNG Disruption

The war, triggered by Iranian missile strikes on a key Qatari LNG hub and disruptions to tanker traffic through the Strait of Hormuz, has upended global energy markets. The Strait normally carries about one-fifth of the world's LNG supply. With Qatari output—accounting for 20% of global LNG—severely constrained, Asian countries are scrambling for alternative cargoes to power their homes and industries. Many are turning to Australia, the world's third-largest LNG supplier, to fill the gap.

Woodside CEO Liz Westcott said the crunch has driven up prices and lifted revenue, even as production volumes dipped slightly. 'The LNG market very much relies on the Middle East, and that's been constrained completely,' Westcott noted, pointing to the surge in sales.

Price Gains and Demand Shifts

Higher prices, however, are starting to erode demand. Some price-sensitive Asian buyers are shifting back to coal-fired power to shield themselves from soaring energy costs. 'You've seen fuel switching in Asia to reduce demand as prices increase,' Westcott said, adding that this trend could temper short-term growth. Analysts warn that the upheaval may have lasting consequences, reminding Asian nations for the second time in four years of the dangers of heavy reliance on LNG—especially after the price spikes following Russia's invasion of Ukraine in 2022.

Yet Westcott does not anticipate a long-term reduction in LNG demand. Instead, she sees Australian suppliers benefiting as buyers reconsider their dependence on Middle Eastern sources and seek more geopolitically stable partners. 'We are seeing customers recognise the benefits of diversification of supply,' she said. 'Our proximity to Asia puts us in a really good place.'

Australia's Fiscal Windfall

The revenue bonanza is also bolstering Australia's budget outlook. Before the conflict, official forecasts had predicted a decline in LNG export income from more than $50 billion to $47 billion by 2027, driven by an impending wave of new projects in the US and Qatar. Instead, the latest government projections show LNG revenue rising from $59 billion in the 2026 financial year to $65 billion in 2027—an $18 billion increase over prior estimates.

'A cessation of LNG output from Qatar due to military conflict has pushed LNG prices up sharply and raised price forecasts,' the federal Industry Department report stated, highlighting the direct impact on national finances.

Long-Term Outlook for Australian LNG

Looking ahead, the conflict could permanently reshape global LNG trade flows. As Asian buyers diversify away from the Middle East, Australian exporters like Woodside are well-positioned to capture a larger share of the market. With its proximity to Asia and reputation for stable supply, Australia may emerge as a long-term beneficiary, even as short-term demand faces headwinds from fuel switching and higher prices. The coming months will test whether this windfall translates into sustained growth or fades once geopolitical tensions ease.