After a blockbuster run of oil mergers and acquisitions in 2023 and 2024, the U.S. energy deal market has hit the brakes in 2025. The slowdown is fueled by falling crude prices, President Trump’s tariff push, and a shrinking pool of attractive acquisition targets.

Industry executives and analysts alike are sounding the alarm. “We’re in a period right now where there’s so much noise and volatility that not a lot gets done,” said Diamondback Energy CEO, underscoring the cautious mood gripping the sector.WTI crude currently trades at around $60 per barrel, while Brent hovers near $64—both down more than 0.5% on the day.

This price environment, combined with financial belt-tightening, has made oil majors reluctant to pursue new deals unless they’re “extremely cheap.”According to energy analytics firm Enverus, the first quarter of 2025 still showed strong deal activity, but the outlook has since darkened.

“Upstream deal markets are heading into the most challenging conditions we have seen since the first half of 2020,” said Enverus principal analyst Andrew Dittmar.One key problem: buyers are running out of cash for premium acquisitions, while sellers—aware of dwindling interest—are hesitant to lower prices.

“Most of the good targets have already been snapped up,” Dittmar added.Even so, a recovery later this year is not out of the question. Analysts say M&A activity could rebound if tariffs ease and recession fears recede.

“One plus one has to equal three,” Exxon’s CEO recently quipped, highlighting the current focus on squeezing maximum value from past deals.

For now, the message from Wall Street to the oil patch is clear: drill less, spend wisely, and wait for better prices.