Buy Hold Sell: The commodities that still run the world (and 4 ASX stocks to play them)

The world is meant to be moving away from oil and gas, yet we are consuming more of it than ever.

Global oil demand is now running at more than 102 million barrels per day, above pre-pandemic levels, and expected to continue growing according to the International Energy Agency. At the same time, oil and gas still account for roughly 55% of global energy consumption, underscoring just how far the transition still has to run.

That’s not to say the shift isn’t happening. Renewables now generate close to 30% of global electricity, and clean energy investment has surged past US$2 trillion annually, well ahead of fossil fuels. But here’s the catch: existing oil fields decline at around 5–7% per year, meaning fresh supply is constantly needed just to stand still.

Recent events have made that juxtaposition impossible to ignore - just ask anyone who has filled up their car at $2.50+ per litre in recent weeks. 

The conflict in the Middle East has provided a sharp reminder that, for all the progress, the global economy remains deeply reliant on hydrocarbons.

Australia remains one of the world’s largest LNG exporters and is home to globally competitive oil and gas producers across the market cap spectrum. In this episode, Acorn Capital’s Rick Squire and Datt Capital’s Emanuel Datt discuss the energy market and run the ruler over four ASX oil and gas stocks. 

This episode was filmed on Wednesday, 8th April 2026.

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Edited Transcript

Chris Conway: Hello and welcome to Livewire's Buy, Hold, Sell. My name is Chris Conway. The war in the Middle East has pushed oil into the spotlight, and with petrol prices surging around Australia, everybody is feeling the pinch. Can buying oil and gas stocks provide any relief? To help answer that question and to run the ruler over some oil and gas stocks, I'm joined by Emanuel Datt from Datt Capital and Rick Squire from Acorn Capital.

Before we dive in, it's just worth noting that we're filming this on Wednesday, April 8, after the US and Iran agreed to a ceasefire this morning, which has sent oil prices tumbling with WTI and Brent both down around 14% today.

Chris Conway: Rick, I'll come to you first, ask you about Australia's oil and gas companies. How do we compare on the world stage?

Australia's oil and gas companies vs global peers

Rick Squire: Sure. It's a little bit mixed. In terms of oil exposure, it's quite limited to get that direct oil exposure. There are companies like Karoon that is producing oil from offshore Brazil. Then there are other companies, Woodside and Santos, that produce oil, but it's actually not a big part of what they do. They're more gas producers with some oil as part of their revenue stream. And so getting that direct oil exposure is more difficult. There are some smaller names there in the mix as well. So that's where there are limited opportunities.

But if you look at gas, it's actually quite different. Woodside, obviously, a major gas producer, Santos as well. But we have a lot of mid-cap and small-cap gas companies as well. And some of them are actually quite exciting in terms of the opportunity in places like the Northern Territory and the Beetaloo Basin. There are companies like Tamboran and Beetaloo that are really emerging. The Taroom Trough, that people might've heard of, names like Omega and Elixir, are doing some really exciting work there.

And then you go down into the domestic producers like the Strikes, the Amplitudes, Beach and the like. And so there's actually a really nice breadth of opportunity in the gas space. So they're providing both exposure to the domestic market as well as the international market. So you can see there's quite a mixture.

Chris Conway: Yeah. We'll talk about some of those, no doubt, in just a second. Emanuel, I'll swing to you. If oil prices stay volatile from here, which they probably will, what actually matters more for returns? Is it the commodity or is it the capital discipline of the companies that are getting the stuff out of the ground?

Commodity or capital discipline - what's more important?

Emanuel Datt: Yeah, I think a lot of it comes down to the capital discipline of the companies themselves. I think that ultimately, none of the companies can control the commodity price, which is an externality. However, they can control how they allocate the returns that they generate from the commodity cycle. So I think that's a really important consideration. I think that ultimately it comes down to whether they want to reward shareholders or invest in growth. If they want to invest in growth, it's a buy versus build argument. So there's a lot of considerations on the table. However, we like to invest in companies that have a very clearly defined capital allocation framework.

Chris Conway: So you know what you're getting.

Emanuel Datt: Exactly. Those are the companies I see thriving in time.

Chris Conway: Yeah, makes sense. Let's talk some stocks right now. First up, we're going to cover Beach Energy - key supplier to Australia's East Coast gas market, operating the Otway Gas Plant and the Lang Lang Gas Plant down here in Victoria, of course, where we're filming these episodes of Buy, Hold, Sell. Emanuel, I'll stay with you. Buy, hold, or sell for Beach Energy?

Beach Energy (ASX: BPT)

Emanuel Datt (BUY): Yeah, sure. So Beach is a buy for us. As you mentioned, it's got a national presence. And I think the thing that excites us most about Beach is the ramp-up of the Waitsia Gas Plant, which is in Western Australia. So that appears to be ramping up fine. And yeah, I think that most interestingly, it's got good exposure to LNG markets that currently, as we stand, are still elevated. So I think that's quite positive despite the fact that they've pre-sold a certain number of LNG cargoes. So that's like a way of hedging, I guess, in some ways. They've still got about 60-plus percent exposure to spot LNG prices, which is quite exciting.

Chris Conway: Yeah. So they get some of that upside. 

Emanuel Datt: Yeah, correct.

Chris Conway: Very good. Rick, pretty much flat over the past year, but it was up 5% in the last month. Buy, hold, or sell for you?

Rick Squire (HOLD): It's a hold for me. I agree with what Emanuel said. We're probably just a little more cautious. They're doing some drilling off Bass Strait for their Otway project at the moment. And in the past, there's been a great success rate, but then you have a look at Amplitude, which has just drilled two wells and had bad results for both of them. And it's really popped the whole industry back on their heels in terms of the ability to convert these wells into successful producing operations. And so there, a little bit of caution around that. They have stopped their dividend, so they're getting ready for some acquisition. So what they buy, they can always make you a little bit nervous. Sometimes acquisitions can be accretive, and sometimes they can be a bit crazy and value-destructive. So just because of that caution about where the next steps will be, whether they'll have some success in the Otway, that's why we're cautious. But agree with Waitsia is starting up, still think there's some positives. So it's definitely not a sell, but we're just a little bit more cautious on that one.

Chris Conway: A bit more information you want to see. Yeah, fair enough. Rick, you mentioned Karoon Energy before in the intro, an international oil and gas exploration and production company, operations offshore Brazil, in the US, and of course, here in Australia. I'll stay with you. Buy, hold, or sell for Karoon?

Karoon Energy (ASX: KAR)

Rick Squire (HOLD): Well, it's probably a hold today. It was probably a buy yesterday with what's going on. But even if the outcome of the ceasefire is successful, it's going to take quite some time to restart a lot of that oil production in the Middle East, and then get that oil to the refineries and get the oil from the refineries to the market. And it'll take several months, and in some case it may even be several years.

Chris Conway: Are you telling us we're paying higher petrol prices for another two years, Rick?

Rick Squire: Unfortunately. I don't know about two years, but they'll certainly be elevated for a while. And for that reason, I think the producers are really going to benefit over the next, certainly the next quarter, the June quarter, and possibly even into the September quarter from elevated prices. And because Karoon is one of those producers that are fully exposed to the oil price, they'll be a beneficiary.  And so, short term, I'll put it on hold. Why is it not a buy? Well, it's come off its highs. There'll be a lot of short-term investors and traders that will wash out. And that's why the price will probably hover at that level just for a little while until people start to see that revenue that's coming out from the elevated oil price.

Chris Conway: Yep. You talked about some of that speculative money down 13% today. So a few people already washing out, but it was up 47% over the last 12 months. Emanuel, buy, hold, or sell for you for Karoon?

Emanuel Datt (SELL): Karoon is a sell for me, and that's purely due to the jurisdictional risk. So we've seen that Brazil enacted a 12% export tax on crude oil. And what that does effectively is it's the upstream oil producers effectively ensuring the crude is kept and sent to domestic refineries essentially. But however, I think that even though this is a short duration in nature, it's about 90 days or somewhere along those lines from memory, there is a potential for it to be extended. If the ceasefire fails for whatever reason, then potentially this spill could be extended. And look, ultimately we're quite focused on jurisdictional risk and all the elements that come alongside that. We're very much focused on Australian producers over offshore. And a part of that is due to the measures such as this that can take away returns for asset owners during times of higher prices in commodities.

Chris Conway: Makes sense. We'll switch gears. We'll talk about Carnarvon Energy next. It does a bit of everything. So some asset development, some exploration, and owns a 19.9% stake in Strike Energy. Emanuel, I'll stay with you. Buy, hold, or sell for Carnarvon?

Carnarvon Energy (ASX: CVN)

Emanuel Datt (HOLD): I'd call Carnarvon a hold for me. I think that it's got some really great assets. It's asset-rich. It's got a lot of things that tick the box. However, the primary asset, which is the interest in Dorado is a stranded asset essentially, or at the mercy of Santos as the operator. Ultimately, that hasn't gone ahead because of cost pressures associated with field development that we've seen eventually over the past few years. So I call it a hold because if you're already in it, you just never know what may happen tomorrow. Who knows if they receive a bid or some other form of M&A action occurs. And so that's why I call it a hold.

Chris Conway: Yep. Rick, it's up around 15% year to date. Buy, hold, or sell for you for Carnarvon.

Rick Squire (SELL): It's a sell for me for similar reasons to what Emanuel mentioned, that it's really not in control of its own destiny, that it has a stake in Strike. It has a stake in Dorado, which is a fantastic discovery up in the Northwest Shelf off Western Australia. So a great discovery. But the majority owner is Santos, and they're spending so much money on other projects that this just isn't a priority. So it doesn't matter how good it is, they're not going to fast-track the development because they just don't have the capital to spend on it. And because they can't control their own destiny... well, Santos could sell the asset, and that could change everything, but we don't know when or if that will happen. And because of that, it's a sell for me.

Chris Conway: Next up, we will talk Santos, you both mentioned there, obviously, with that Dorado asset. Global energy player, of course, operations across Australia, PNG, Timor-Leste, and the US. Supplies domestic gas in Australia and liquefied natural gas in Asia. Rick, buy, hold, or sell for Santos?

Santos (ASX: STO)

Rick Squire (HOLD): It's a hold for me, again, in light of what happened with the ceasefire being announced today. The world is going to think a little bit differently about gas, and jurisdictional risk around gas supply. The world is also realising the importance of gas and petroleum, not just as a source of petrol to put into your car, but for the plastics that you put your bread into, that the resins that are necessary for producing plastic bags actually come from refineries. And so I think there'll be a little bit of a tilt back towards some of these energy stocks and realisation that they're more than just oil, that they're actually an integral part of the way we live and operate. And so companies like Santos will benefit. But I think there's, again, there's been a tilt towards the Woodsides and Santos, these big oil and gas companies, just through the war over the last month or so. And so that's why it's a bit of a hold that yesterday it was a buy, today it's a hold, but that's how dynamic our market is.

Chris Conway: I'll ask you again tomorrow and probably get another different answer. So up 35% over the last 12 months, but taking a hit today along with the rest of the energy complex, I think it was down around 5% by close. Emanuel, same question, obviously. Buy, hold, or sell for you for Santos?

Emanuel Datt (BUY): Santos is a buy for me, and why that is is because they've completed a big cycle of CapEx. So they brought on projects like Berossa and Pikka, which had the delivery phase, I guess. And that means that the company can actually focus on making those capital allocation decisions that may reward shareholders. And they've come out with various frameworks. I think that another attractive thing about Santos is there's a number of growth options in their portfolio, and that they may be sped up effectively by our change in government energy policy, for instance, going back to Rick's point about the government finally realising that you need hydrocarbons to live a modern life, right? So we think that may be one of the ancillary benefits for Santos shareholders in the fullness of time. So that's why we like Santos. We think that it's over that big CapEx hump, and now it's probably the time to harvest and make a decision on what it does with all the cash it's generating.

Chris Conway: There we go. Closing on a buy for Santos from Emanuel.

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