Woodside Energy Group Ltd (ASX: WDS) shares have not only gained 21% in the past year, they’ve also delivered some outsized passive income.
In fact, the S&P/ASX 200 Index (ASX: XJO) oil and gas stock’s last interim dividend and last final dividend payout both marked new record highs.
Over the last 12 months, Woodside shares delivered an interim dividend of $1.60 per share and a final dividend of $2.15 per share for a full-year dividend payout of $3.75 per share, both fully franked.
At Tuesday’s closing share price of $38.40, that equates to a trailing yield of 9.8%.
But could the juicy dividends from Woodside shares come under pressure?
Is the US going to rain on the dividend party?
The outlook for dividends from Woodside shares is closely linked to the oil price.
The record dividends mentioned above were fuelled by crude oil trading near record highs.
While oil prices tumbled from those US$122 per barrel June 2022 highs, production cuts from OPEC+ have managed to get the Brent crude price back above US$85 per barrel. Brent was trading for just US$72 per barrel as recently as 27 June this year.
Now, most analysts are still forecasting Brent to trade in the US$80 to US$90 per barrel range over the coming year.
But there is some risk to the downside here, which could put a dent in the medium-term outlook for the dividends from Woodside shares.
And that risk comes from a strong increase in crude exports out of the United States, which in recent years has taken the mantle of the globe’s top oil producer.
According to the US Energy Information Administration (EIA), crude exports out of the US in 2023 are up 15% from this same period in 2022, averaging 4.08 million barrels per day this year.
And that’s helping keep a lid on the oil price in Asian and European markets — and, by connection, throwing up some modest headwinds for Woodside shares.
A recent change looks to be impacting the export markets and price of global benchmark Brent. That came in June when Platts (which publishes the oil index) added US WTI Midland crude oil transactions into its Platts dated Brent price assessment.
According to market analyst at Vortexa Rohit Rathod (quoted by Reuters), “As Midland becomes more and more important in the dated Brent assessment, it has a knock on effect on other grades having to price themselves lower to compete with WTI Midland.”
Citing a surge in WTI Midland crude being sent east in August, director at Surrey Clean Energy Adi Imsirovic added:
There is more and more WTI production flooding the global markets… WTI is freely traded, without destination and output restrictions, and WTI value has become a key to the global pricing.
How have Woodside shares been tracking longer-term?
Woodside shares are up 21% in a year. So far in 2023, the ASX 200 energy stock has gained 9%. These figures don’t include the past year’s two record dividend payouts.
