https://ghostarchive.org/archive/9fEKb

The Iran war has brought US oil and gas dealmaking to a standstill after a strong start to the year as volatile crude prices make it difficult to price transactions.

Brent crude futures, the international benchmark, rose 0.9 per cent to $113.24 a barrel at the open of trade in the Asian morning on Monday. West Texas intermediate, the US benchmark, climbed 2.1 per cent to $100.29 a barrel.

US oil and gas dealmaking year to date has reached $45bn, its highest in two years, according to Dealogic data, as a result of the merger between two Permian Basin players Devon Energy and Coterra Energy.

But oil and gas talks had slowed or been put on hold as companies waited for markets to calm and crude prices to settle, several bankers and lawyers working on US deals said.

“Everything has just shut down,” said Bryan Loocke, partner at law firm Vinson & Elkins specialising in oil and gas M&A. “I’ve got a couple of deals going, they are longer-term contracts, but everything is in paralysis right now because no one can price anything.”

The predicament has come ahead of CERAWeek in Houston, traditionally the industry’s busiest dealmaking event. The conference was going to be “very different this year”, said one London-based senior energy banker.

“I have three or four disposal processes running and we have put them all on hold,” he said. “There is no point in taking bids, they will be all over the place.”

Following the pandemic, oil and gas companies cleaned up their balance sheets, focusing on efficiency and shareholder returns and leading to a wave of dealmaking.

Industry veterans were predicting another busy year in 2026 as a result of further consolidation in the shale patch, rising international demand for US gas, particularly from companies in Asia, and increased energy demand from the AI build-out.

Under the Trump administration, oil and gas deals have been subject to less scrutiny than during Biden’s tenure, when deals were interrogated by the Federal Trade Commission. Companies may be looking to close deals before the end of Trump’s term in order to take advantage of the permissive environment, said one banker.

“I think volatility is usually bad, but this feels like a bit of a different market,” said Conrad Gibbins, co-head of upstream, Americas at US investment bank Jefferies in Houston.

The rise of asset-backed securities transactions in the oil and gas sector, an alternative to traditional lending based on resource reserves, has also led to increased activity.

“The development of the ABS market has fundamentally changed cost of capital for buyers, bringing access to the investment grade debt markets to a wide range of buyers,” said Gibbins. “More broadly, scarcity of higher quality assets of scale is also driving fierce competition for assets in today’s market.”