Chevron is buying Hess Corp. for $53 billion and it’s not even the biggest acquisition in the energy sector this month as major producers seize the initiative while oil prices surge.

Crude prices rose sharply in early 2022 with Russia’s invasion of Ukraine and are hovering around $90 per barrel after ticking another 9 per cent higher this year, meaning big drillers are flush with cash and looking for places to invest piles of cash.

The Chevron-Hess deal comes less than two weeks after Exxon Mobil said that it would acquire Pioneer Natural Resources for about $60 billion.

Upward pressure on oil prices are being applied from a number of fronts including the war in Ukraine. Oil markets are being stretched by cutbacks in oil production from Saudi Arabia and Russia, and now, a war between Israel and Hamas runs the risk of igniting a broader conflict in West Asia.

While attacks on Israel do not disrupt global oil supply, according to an analysis by the US Energy Information Administration, “they raise the potential for oil supply disruptions and higher oil prices.”

Chevron said Monday that the acquisition of Hess adds a major oil field in Guyana as well as shale properties in the Bakken Formation in North Dakota.

Guyana is a South American country of 791,000 people that is poised to become the world’s fourth-largest offshore oil producer, placing it ahead of Qatar, the United States, Mexico and Norway.

It has become a major producer in recent years with oil giants, including Exxon Mobil, China’s CNOOC, and also Hess, squared off in a heated competition for highly lucrative oil fields in northern South America.

“This combination is aligned with our objective to safely deliver higher returns and lower carbon,” Chevron Chairman and CEO Mike Wirth said.

Chevron is paying for Hess with stock. Hess shareholders will receive 1.0250 shares of Chevron for each Hess share.