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(Bloomberg) — Energy markets will continue to be impacted by the Russian invasion of Ukraine and the Israel-Hamas conflict, according to Woodside Energy Group Ltd., Australia’s largest oil and gas producer
“The fallout has been massive, and the volatility is not over,” Chief Executive Officer Meg O’Neill said in a speech Tuesday to the Australian Energy Producers Conference in Perth. “It is instability absolutely nobody wants.”
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While oil and gas have retreated after spiking following the invasion in early 2022, they remain elevated. Liquefied natural gas prices are currently at the highest level since early January, and Brent, the global oil benchmark, has risen around 9% this year.
Recent challenges mean there’s a need to provide consumers with better security of supply, a factor that’s supporting the outlook for natural gas along with rising energy demand in economies across Asia, O’Neill said.
Read More: LNG Demand Will Surge 50% in Next Decade, Woodside CEO Says
Australia’s government this month backed the development of new gas resources, arguing production of the fossil fuel will be necessary to sustain the nation’s export sector and also to avoid domestic energy shortfalls as coal plants are shuttered.
“We know how important our LNG is to keeping the lights on in Tokyo, or to fueling manufacturing in South Korea,” Samantha McCulloch, CEO of Australian Energy Producers, an industry organization, told Bloomberg Television in an interview on Tuesday. “We have the stability now in the policy settings to bring on those new investments that are needed.”
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Woodside is advancing developments including the $12 billion Scarborough LNG project in Australia. Other potential new facilities from other companies include a expansion of the Ichthys LNG export plant in Western Australia and a new 6.6 million ton a year plant in the Northern Territory, the government said in a report in December.
“To my mind the best solution to a shortage is always supply, supply, supply,” O’Neill said in the speech. “We as industry are ready to roll up our sleeves.”
—With assistance from Haidi Lun and Annabelle Droulers.
(Updates with industry group CEO comments from sixth paragraph)
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