The S&P/ASX 200 Index (ASX: XJO) declined by 7.8% in March, a downturn that occurred even as most ASX 200 energy shares posted significant gains.

In fact, from the market close on February 27 to the close on March 31, the S&P/ASX 200 Energy Index (ASX: XEJ) delivered a remarkable surge of 18.5%.

Here is the performance of leading Australian oil and gas producers during the past month:

• Woodside Energy Group Ltd (ASX: WDS) shares increased by 23.8%
• Santos Ltd (ASX: STO) shares advanced by 17.8%
• Beach Energy Ltd (ASX: BPT) shares rose by 18.2%
• Karoon Energy Ltd (ASX: KAR) shares jumped by 32.9%

So, what drove investors towards the energy sector in March?

ASX 200 Energy Shares Jump on Soaring Oil Prices

The substantial outperformance of ASX 200 energy shares such as Woodside and Karoon was fueled by a sharp rise in oil and gas prices. This price surge followed military actions involving the US and Israel against Iran.

According to Bloomberg data, Brent crude oil was trading at US$72.50 per barrel on February 27. By March 31, the price for the same barrel had climbed to US$107.50, representing an increase of more than 48% for the month.

This rapid price increase occurred as approximately 20% of the world's oil supply routes were disrupted. The conflict led to the effective closure of the Strait of Hormuz, while gas supplies were also impacted by attacks on liquefied natural gas (LNG) facilities in the Middle East.

Beyond anticipating share price appreciation, investors also appeared to be buying ASX 200 energy shares with the expectation that soaring profits would lead to larger dividend payments later this year.

Other Developments for Australian Energy Giants in March

Beach Energy, Santos, and Woodside were among the ASX 200 energy companies that made significant announcements in March.

On March 9, Beach and Santos announced they had reached a Final Investment Decision (FID) to proceed with their joint venture Moomba Central Optimisation (MCO) project, which is located in South Australia.

Commenting on the decision, which resulted in Santos shares closing up 2.4% and Beach Energy shares gaining 1.3% on the day, Beach Energy CEO Brett Woods stated:

The MCO project will unlock significant value from the Cooper Basin asset, driven by efficiencies gained from the rationalisation of existing satellite facilities into a new centralised compression facility, and supporting future production growth from the Central Fields.

March also saw Woodside announce its new CEO, following the departure of former CEO Meg O'Neill in December after four years in the role.

On March 18, the ASX 200 energy company reported that Liz Westcott was assuming the positions of CEO and Managing Director, effective immediately.

Westcott had been serving as acting CEO since O'Neill's departure in December. Prior to that, she held the position of Woodside's Executive Vice President and COO, Australia.