U.S. oil mergers and acquisitions (M&A) have experienced a significant decline in 2025, with only $17 billion in deals over the past three months compared to a peak of $144 billion in the third quarter of 2023. This downturn is attributed to low oil prices and cautious investor sentiment amidst trade uncertainties under the current administration.
Benchmark U.S. crude oil prices have fallen to approximately $55 per barrel from $78 in January, impacting the profitability of potential deals and leading buyers to prioritize value over volume. Companies are focusing on extracting synergies from past acquisitions rather than pursuing new ones, especially as premium assets in the Permian Basin have largely been acquired, leaving behind less attractive acreage.
Major players like Exxon Mobil and Diamondback Energy are exercising restraint, emphasizing value creation and digesting large past acquisitions. Analysts expect muted deal activity to continue through the first half of 2025, with the potential for a rebound if favorable trade deals emerge and recession fears subside.
The decline in U.S. oil M&A activity reflects a strategic shift in the industry toward value-focused investments amidst economic uncertainties. Companies are adopting a cautious approach, prioritizing operational efficiency and long-term sustainability over rapid expansion. The industry's future M&A landscape will depend on market conditions, regulatory developments, and the evolving global energy demand.