Small-cap oil and gas producer Amplify Energy announced a “transformational” acquisition in January to add almost 300,000 net acres of crude-heavy assets in Wyoming.

But the celebratory engagement was short lived. It was a risky growth play for a minor player. Shareholder doubt quickly turned to defiance when coupled with President Trump’s barrage of tariffs and global oil oversupply fears.

On April 25 Amplify terminated the deal, citing “extraordinary volatility in the market.”

A record-breaking spree of oil and gas dealmaking since mid-2023 slowed late last year and has now come to a grinding halt courtesy of a dour economic outlooks from tariffs. While Amplify’s merger was canceled, some pending deals may be renegotiated, and others will now never come to fruition, energy analysts said.

“When there’s compounded volatility, oftentimes you start to see a slowdown in the [M&A] market,” said Angie Gildea, KPMG energy leader. “Primarily, it’s because it’s hard to find a price between the buyer and the seller.”

Companies will look to make non-core asset sales, job reductions, and contract renegotiations, she said, but they won’t aim to grow through big acquisitions any longer. They’re “battening down the hatches,” she said.

Amplify declined to comment for this story, although its stock price is partially rebounding since the deal cancelation—after the stock had plunged by more than 50% since mid-January down to micro-cap levels.

Andrew Dittmar, principal analyst for Enverus Intelligence Research, said it’s “unfortunate” but “not surprising they decided to call that one off.”

“As such a small company, Amplify is going to be more sensitive to commodity price moves,” he added.

The tariff-induced slowdown comes at the tail end of a huge surge in dealmaking, led by Exxon Mobil acquiring Pioneer Natural Resources for $60 billion, ConocoPhillips buying Marathon Oil for $22.5 billion, and the still-pending Chevron acquisition of Hess for $53 billion.

“We’re coming off of an oil-price environment that was extremely supportive of M&A,” Dittmar said. “It’s significantly more challenging now.”

The U.S. benchmark price for crude oil hovered between $75 per barrel and $80 a barrel for much of that period. “The stable price made deals easier to negotiate,” he said. “The sellers felt they were getting good value for their assets, but buyers weren’t concerned that they were picking up interest at an absolute peak.”

Now there is much greater volatility, and the oil price is just above $60 per barrel—a threshold when the industry scales back spending, activity and acquisitions.

The other more overlooked factor, Dittmar said, is the onshore oil sector is maturing and there is much more “inventory scarcity” after the most recent round of M&A.

“Sellers are well aware of how limited higher-quality inventory is—or even medium-quality—so I think that’s going to keep them anchored to relatively high asking prices,” Dittmar said, and most buyers won’t agree to those high asks.

Tracking the trends

After a record-high year of almost $200 billion in oil and gas production deals in 2023, things slowed to a still-high $107 billion in 2024. The first quarter of 2025 dipped further still to $17 billion, according to Enverus, and now deals are at a standstill and expected to stay that way for some time.

The $17 billion in the first quarter is even misleading because the two biggest deals are from the same company. The Permian Basin’s Diamondback Energy bought Double Eagle for $4.1 billion, and then Diamondback dropped down assets to its subsidiary, Viper Energy, for nearly $4.3 billion, accounting for about half of the quarter’s total M&A value.

Diamondback’s Double Eagle deal closed April 1—unfortunate timing considering the tariffs, but manageable for a large producer.

With prices at a premium in the Permian, the industry expected deals to spread throughout the rest of the country in 2025. But the oil environment has put a chill on that for the foreseeable future, Dittmar said, and those assets are not as high quality.

The one exception is the gassy Appalachia region that’s not exposed to oil prices. There, major gas producer EQT just bought Olympus Energy in the Marcellus Shale for $1.8 billion in early April.

Otherwise, the biggest pending deal, Chevron-Hess, shouldn’t be dramatically impacted.

“For Chevron buying Hess, they’re making a multi-decade bet,” Dittmar said. “They’re not going to let near-term volatility particularly influence that.”

The next question, he said, is what happened if the trade wars persist late into 2025 and beyond. That’s when dealmaking could continue in the form of distressed asset sales or bankruptcies if smaller or struggling companies fall under.

“If we’re at $60 or going below in 2026, I think there’s more companies that are going to come under pressure,” he said. “That could create an interesting market—whether some of the companies capitulate and launch strategic alternative programs and decide that selling in a depressed commodity price environment is the best option, or they try to sell of non-core assets to reduce leverage.

“We’re kind of in a holding period for now and then seeing how it plays out in the back half of 2025 and into ’26.”

This story was originally featured on Fortune.com