Sydney, Jan 31, 2026, 17:28 (AEDT) — Market closed.
- On Friday, Santos finished up 2.49%, closing at A$7.01.
- Queensland approved new gas exploration permits for Santos just as Canberra prepares to introduce a domestic gas reservation starting in 2027.
- Oil hovered close to six-month peaks, with Santos set to report results on Feb. 18 as the next major milestone.
Santos Ltd STO.AX shares ended Friday’s session 2.49% higher at A$7.01, having swung between A$6.92 and A$7.08 ahead of the ASX weekend close.
The bid surfaced as investors digested new exploration permits in Queensland alongside a pending policy shift affecting the east coast gas market. Queensland’s government handed out three fresh gas exploration permits to Santos and smaller player Drillsearch. Meanwhile, Canberra is pushing a gas-reservation scheme set to kick in from 2027, requiring LNG exporters to reserve 15%-25% of their gas for local buyers. Santos-operated Gladstone LNG has depended heavily on third-party domestic gas to fulfill its export contracts.
The crunch is happening now. If more gas stays domestic, exporters lose flexibility and might have to shell out more to secure supply and keep shipments flowing. Investors are already running the numbers, long before the rule takes effect.
Crude prices played a role as well. Brent closed Friday at $70.69 a barrel, while U.S. West Texas Intermediate ended at $65.21. Traders kept a close eye on U.S.-Iran tensions. “It’s really all about Iran right now,” said John Kilduff of Again Capital. Reuters
Santos is eyeing company-specific triggers ahead. Its January quarterly report highlighted roughly $1.8 billion in free cash flow from operations projected for 2025. The company noted that Barossa’s initial LNG cargo was loading at Darwin, following a roughly two-month delay caused by pipework problems. CEO Kevin Gallagher described the firm as having “a strong platform for production growth.” Santos plans to publish full-year results on Feb. 18, accompanied by a webcast briefing at 11 a.m. AEDT.
As trading restarts Monday, the stock will watch both oil prices and Canberra closely. Even a small signal on the domestic set-aside’s toughness or enforcement could shift the entire east-coast LNG narrative.
The risk lies in policy and price. Stricter set-asides or tougher enforcement could force exporters to redirect gas from higher-priced overseas markets or scramble for local supply at inconvenient times. Oil prices can swing the opposite way just as quickly if geopolitical tensions ease.
Santos’ February update will offer insight into spending and schedules for its growth projects, while also revealing if management feels more confident about reliability following the Barossa commissioning.
The next major event is Feb. 18. Until then, Santos’ share price will respond to oil price shifts and any new hints about the direction of Australia’s gas-reservation scheme.
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