Rising power demand, continued LNG expansion and renewed geopolitical uncertainty have reshaped energy markets since 2025, influencing both commodity prices and investment activity across the sector. While these developments have affected commodities differently, they have collectively increased investor focus on supply reliability, energy security and long-term demand growth. Crude oil prices came under pressure during 2025 due in part to concerns regarding global tariffs and broader market uncertainty, but market conditions have since shifted. Rather than facing continued downward pressure, oil markets have experienced renewed price volatility alongside evolving geopolitical developments. At the same time, greater attention has been placed on the importance of stable US oil and natural gas production.

Recent geopolitical events, including the conflict involving Iran, have reinforced the importance of reliable energy supply, supply-chain resilience and diversified energy sources, underscoring the strategic role of US oil and natural gas production. Concerns regarding potential disruptions to key energy transportation routes, including the Strait of Hormuz, have contributed to renewed focus on supply security and the value of diversified sources of oil and natural gas. Stronger pricing, however, has not translated into broad production growth, as operators continue to favour measured development activity over aggressive expansion.

Oil markets have largely recovered from the pricing pressure experienced in early 2025, although drilling activity remains relatively restrained. Despite stronger commodity pricing, US drilling activity remained measured, with the total US rig count reaching 551 rigs as of 15 May 2026 and remaining below prior-year levels. This indicates that operators remain focused on efficiency, shareholder returns and measured development activity rather than broad production growth.

That discipline has also influenced transaction activity across the sector. While prior years were characterised by large-scale consolidation focused primarily on Permian Basin inventory and scale, buyers have adopted a more selective approach, placing greater emphasis on access to key assets and markets, existing production and assets connected to LNG development and rising electricity demand. US upstream M&A activity reached approximately USD38 billion during the first quarter of 2026, representing the strongest quarterly performance in two years, although activity slowed in March amid increased oil price volatility. Transactions including Devon Energy’s approximately USD26 billion merger with Coterra Energy and Mitsubishi Corporation’s acquisition of Aethon Energy demonstrate sustained interest in large-scale production platforms, natural gas assets and regions connected to LNG and power generation markets.

Although oil market conditions improved relative to 2025, investor attention has remained focused on natural gas and related infrastructure rather than returning to primarily oil-focused growth strategies. Rising electricity demand and expanding natural gas export markets have reinforced that shift.

The United States has maintained its position as the world’s largest LNG exporter and, in 2025, became the first country to export more than 100 million metric tonnes of LNG in a single year, reaching approximately 111 million metric tonnes compared to 88.4 million metric tonnes in 2024. US LNG exports averaged approximately 15.0 Bcf/d in 2025, with additional growth expected as liquefaction and related infrastructure projects advance.

Although natural gas markets continue to experience periods of pricing volatility, investor interest in gas-weighted assets has remained broadly consistent. At the same time, investors appear increasingly focused on infrastructure access, contracted revenue streams and opportunities linked to LNG development and rising electricity demand rather than commodity exposure alone.

As a result, transaction activity across the upstream, midstream and downstream sectors has favoured natural gas production, LNG infrastructure, power generation assets and other investments positioned to benefit from long-term demand growth, supply security considerations and increasing electricity consumption.

Energy companies continue to pursue strategic M&A activity focused on natural gas demand and supporting infrastructure.

Upstream

Recent deals demonstrate continued interest beyond the Permian Basin

Growing natural gas demand has shifted attention beyond the Permian Basin and towards gas-rich regions such as Appalachia and the Haynesville Shale. Transaction activity reflects that shift, with buyers pursuing assets positioned to serve export facilities and expanding power markets.

One of the most significant transactions in early 2026 was Mitsubishi Corporation’s deal to acquire Aethon Energy, a major natural gas producer with operations concentrated in the Haynesville Shale. The transaction underscores the appeal of Haynesville assets, whose proximity to Gulf Coast LNG facilities positions the basin as an important source of supply for expanding export markets. Similarly, Devon Energy’s approximately USD26 billion merger with Coterra Energy reflects sustained interest in natural gas assets alongside more traditional consolidation objectives.

Additional activity in the Haynesville highlights the basin’s importance to LNG-related demand. In February 2026, JERA Co. completed its approximately USD1.5 billion acquisition of the South Mansfield asset in Louisiana. The transaction marked JERA’s first direct investment in US shale gas production and reflects growing international interest in securing natural gas supplies connected to Gulf Coast LNG export facilities.

Recent acquisitions demonstrate the value buyers continue to place on assets located near LNG facilities and major sources of power demand. While production growth remains important, transaction activity increasingly appears focused on securing access to key end markets and infrastructure positioned to benefit from long-term demand trends.

The ongoing focus on Appalachia, the Haynesville and other gas-rich regions demonstrates that the move beyond purely Permian-focused consolidation remains intact. As LNG exports expand, electricity demand rises and concerns regarding energy reliability persist, assets with access to established infrastructure and end markets are likely to remain attractive acquisition targets.

Private capital and long-term investors

Private capital continues to play a significant role in energy investment, although investor priorities have evolved alongside changing market conditions. Private equity fundraising had begun recovering after several years of decline, with investors targeting income-producing energy assets and opportunities tied to rising natural gas demand. That focus has broadened beyond traditional upstream investments.

Capital is increasingly being deployed across LNG infrastructure, power generation, storage assets and other facilities needed to support growing electricity demand. For example, Commonwealth LNG recently reached a final investment decision supported by approximately USD21.25 billion of equity and debt commitments from a diverse group of investors, including Kimmeridge, Mubadala Energy, CPP Investments, BlackRock-managed funds and Ares Infrastructure Opportunities. The project reflects strong investor interest in long-term energy infrastructure assets supported by contractual cash flows and growing global demand.

Beyond traditional private equity sponsors, pension funds, sovereign investors and other long-duration sources of capital are playing a larger role in energy investments. These investors are often attracted to opportunities that offer long-term value creation, stable cash flows and exposure to durable energy demand trends. Investor interest increasingly extends beyond upstream production assets to LNG infrastructure, power generation and other assets positioned to benefit from expanding energy consumption. Private infrastructure investors are also pursuing opportunities linked to rising electricity demand and energy reliability.

These investments indicate that long-term investors continue to view energy assets linked to reliability, infrastructure and growing demand as attractive opportunities. However, current investment activity is increasingly concentrated in infrastructure, reliability-focused assets and businesses positioned to benefit from growing electricity demand, LNG development and broader supply-security considerations rather than production growth alone.

International buyers continue expanding US exposure

International interest in US natural gas assets remains strong. Buyers from outside the United States continue seeking exposure to US natural gas production, LNG assets and long-term energy supply opportunities.

One notable example is Mitsubishi Corporation’s acquisition of Aethon Energy, which will expand the company’s exposure to the Haynesville Shale, one of the most important natural gas basins supporting Gulf Coast LNG exports. In addition, Mubadala Energy has expanded its presence in the US natural gas value chain through its investment in the Caturus platform and Commonwealth LNG project. These transactions reflect sustained international interest in assets positioned to benefit from growing global demand for natural gas and LNG.

Other transactions further illustrate international interest in US energy assets. In February 2026, Harbour Energy completed its approximately USD3.2 billion acquisition of LLOG Exploration, marking its strategic entry into the US Gulf of Mexico. Earlier, TotalEnergies acquired a 49% interest in Continental Resources’ Anadarko Basin natural gas assets, further integrating its US natural gas production with its broader LNG value chain. Similarly, JAPEX invested approximately USD1.3 billion in oil and natural gas assets in Colorado and Wyoming, reflecting a broader trend of international companies seeking direct exposure to US production and infrastructure opportunities.

International interest extends beyond upstream production. LNG infrastructure development remains active globally, with companies such as Tokyo Gas and Petronas pursuing investments in LNG and regasification infrastructure designed to strengthen supply reliability and support growing energy demand. These investments demonstrate that market participants continue to view LNG infrastructure as an important component of long-term supply-security strategies.

The continued participation of international buyers reflects the attractiveness of US natural gas assets not only because of resource quality, but also because of their role in supporting global LNG markets and broader energy-security objectives. Recent geopolitical developments, including the conflict involving Iran and ongoing concerns regarding global energy supply routes, have further underscored the importance of reliable and diversified energy supplies. As governments and market participants increasingly prioritise supply security and resilience, US natural gas production, LNG export capacity and supporting infrastructure are likely to remain attractive targets for international investment.

Midstream

Existing infrastructure remains a focus for investors

Midstream transaction activity remains robust as investors seek exposure to natural gas assets supporting LNG exports and rising electricity demand. In particular, investors continue to favour existing pipeline, storage and transportation systems supported by long-term contracts and established customer relationships.

One example is Kinder Morgan’s acquisition of the Monument Pipeline system serving the Houston metropolitan area for approximately USD505 million. The system provides transportation and storage services to gas utilities, LNG shippers and industrial customers and is supported by long-term take-or-pay contracts. Kinder Morgan noted that the acquisition complements its existing Texas natural gas pipeline network and provides additional contracted growth opportunities within the region.

Other transactions underscore investor interest in assets supporting LNG exports and expanding power markets. In October 2025, Williams acquired interests in Woodside Energy’s Louisiana LNG project, including an ownership interest in the LNG facility and the associated Driftwood Pipeline, directly linking pipeline infrastructure to one of the largest LNG export projects currently under development. Similarly, Targa Resources’ acquisition of Stakeholder Midstream expanded its position in natural gas gathering and processing assets serving key production regions.

Institutional investors have also remained active in the sector. KKR and CPP Investments announced an agreement to acquire a controlling interest in Sempra Infrastructure Partners, while ADIA retained its existing minority ownership interest. The transaction is expected to close in 2026 and highlights ongoing demand for large-scale energy infrastructure assets supported by long-term contractual cash flows and opportunities associated with LNG development.

Taken together, these transactions demonstrate the value investors continue to place on assets connected to LNG markets and growing sources of electricity demand. Buyers increasingly prioritise assets capable of generating stable cash flows while supporting long-term demand growth, rather than commodity exposure alone.

Downstream

Rising electricity demand continues to reshape downstream investment

Rising electricity demand associated with artificial intelligence, data centres and digital infrastructure has become a significant driver of energy investment. Utilities, power producers and investors are pursuing generation and infrastructure assets capable of supporting rapidly growing electricity needs.

Utility and power companies have moved to position themselves for that growth. In one of the largest power-sector transactions in recent years, Constellation announced its acquisition of Calpine Corp. for a net purchase price of approximately USD26.6 billion. The transaction combines Constellation’s nuclear generation fleet with Calpine’s natural gas generation assets, expanding the company’s ability to serve growing power demand associated with data centres and digital infrastructure. Similarly, NRG Energy completed its approximately USD12 billion acquisition of a portfolio of natural gas-fired generation assets, significantly increasing its generation capacity and exposure to rising energy demand.

These transactions reflect the view that reliable power generation will be a critical component of future economic growth. While much of the recent discussion has focused on natural gas demand associated with data centre development, investment activity is extending across the broader power value chain as companies seek to secure sufficient generation capacity to meet future needs.

Private capital has also remained active in the sector. Investors continue to pursue opportunities tied to power generation, storage and infrastructure supporting data centre development. Transactions involving generation assets and battery storage projects reflect growing recognition that rising electricity demand will require investment not only in new generation capacity, but also in the infrastructure necessary to maintain reliability and grid stability.

Recent geopolitical developments and heightened attention to supply security have further reinforced the importance of reliable power infrastructure. As data centre development, electrification and electricity demand accelerate, market participants are increasingly focused on ensuring sufficient generation, storage and transmission capacity to support long-term growth.

Conclusion

While oil market conditions remain attractive and appear promising over both the short and long term, investor attention remains focused on natural gas, LNG-related assets and opportunities positioned to benefit from rising electricity demand.

At the same time, supply security, reliability and growing electricity needs associated with data centre and digital infrastructure development are increasingly shaping investment decisions across the energy value chain. These trends have supported sustained M&A activity across the upstream, midstream and downstream sectors, with buyers placing greater emphasis on long-term demand growth, access to key markets and strategic positioning within evolving energy systems.

Recent geopolitical developments, including the conflict involving Iran, have reinforced the importance of supply resilience and diversified energy sources. As LNG exports expand and electricity demand continues to increase, energy companies, infrastructure investors and private capital providers are likely to remain focused on assets that support reliable energy supply, strengthen critical energy networks and provide exposure to long-term demand growth in both domestic and global markets.

More broadly, recent transaction activity suggests that investment decisions are increasingly being driven by access to infrastructure, reliability and end-market demand rather than commodity exposure alone. As power demand, LNG exports and energy security considerations continue to influence capital allocation decisions, assets positioned to support these trends are likely to remain central to energy investment and M&A activity in the years ahead.