This past year has been a relatively quiet one for the oil market. After a brief bounce, crude prices are on track to end the year right around where they began in the low $70s. There haven't been any major supply disruptions, while demand has remained resilient.

It's anyone's guess what oil prices will do in 2025. I've seen predictions that crude will remain around its current level next year, with other prognosticators believing it could collapse to $50 a barrel. Given that oil prices are tough to predict, I'm going to level that one alone.  

However, I do have a couple of rather bold predictions for what I see ahead for some notable oil stocks next year. Here are two things I think could happen in 2025.

Prediction: Chevron will beat Exxon and close its acquisition of Hess

A wave of M&A activity has washed over the oil sector in recent years. ExxonMobil (XOM 0.69%) kicked things off in early October 2023 when it agreed to buy Pioneer Natural Resources in a $59.5 billion all-stock deal. Fellow oil giant Chevron (CVX 0.56%) followed that up by agreeing to buy Hess (HES 0.75%) in a $53 billion all-stock deal a few weeks later. Several other oil companies also agreed to merge over the past year.

While Exxon closed its needle-moving merger with Pioneer last May, Chevron has yet to wrap up its deal with Hess. It has Exxon to blame. Its big oil rival believes that the merger agreement triggered a change of control provision in its joint development agreement with Hess and China's CNOOC in Guyana, which gives Exxon the right of first refusal to buy Hess' 30% interest in that lucrative oil field.  

The two companies are currently in arbitration, with a hearing set for May 2025. I predict Chevron will win its case. While Hess' position in Guyana is the main draw, it's not the only factor driving Chevron's acquisition. Adding Hess would also enhance the company's existing operations in the Gulf of Mexico and Southeast Asia. On top of that, it would bolster the company's U.S. onshore position by adding the Bakken shale of North Dakota to its portfolio. Closing the Hess deal would really move the needle for Chevron, which could outperform in 2025 if it wins its case.

Prediction: Energy Transfer will continue consolidating the midstream sector

Energy Transfer (ET -0.21%) is one of the largest companies in the U.S. midstream sector. The master limited partnership (MLP) has invested heavily in expanding its operations over the years by completing organic capital projects and acquiring other midstream companies.

The company is a leading consolidator in the midstream space. Over the last few years, it has acquired Enable Midstream (2021), Woodford Express (2022), Lotus Midstream (2023), Crestwood Equity Partners (2023), and WTG Midstream (2024). These deals have ranged from $7+ billion merger deals with smaller MLPs (Crestwood and Enable) to private midstream company purchases (Woodford, Louts, and WTG).  

I expect Energy Transfer will continue to gobble up other midstream companies in 2025. While it has many options, I predict it will buy Western Midstream Partners (WES -0.49%). The MLP focuses on providing gathering and processing services in the Rockies and Permian Basin, two core operating areas for Energy Transfer. A deal with Western Midstream seems more likely than others because the MLP's parent company is Occidental Petroleum (OXY 1.33%). The oil company has been selling down its stake in the MLP to repay debt. It could sell its remaining interest to Energy Transfer, which could then offer to buy the remaining units of Western Midstream from outside investors. That deal could enable Occidental to rapidly monetize its position to accelerate its debt reduction. Meanwhile, it would enhance Energy Transfer's scale and growth profile. 

M&A will likely remain a hot trend in 2025

M&A activity has been a major storyline in the energy sector over the past couple of years. I predict that it will remain a key theme in 2025. Deals can help some companies enhance their growth prospects (Chevron and Energy Transfer) while enabling others to shore up their financial situations (Occidental). Because of that, the continued surge in M&A could help create more value for energy sector investors in 2025 and beyond.