That under-performance has created the perfect opportunity for mega oil names to look towards consolidation for growth—and every single U.S. oil company is a potential takeout target, according to Oppenheimer senior analyst Fadel Gheit.
Crude rose and fell in volatile trading last week ahead of Friday's OPEC meeting, where the cartel decided to keep output steady at 30 million barrels per day, even as the U.S. continues to churn out more than 9 million barrels per day. Both international Brent and West Texas Intermediate (WTI) have surged off multi-year troughs, but remain far below the levels above $100, where they traded last year before U.S. supply began pushing down crude prices.
Even with the most recent volatility, oil has still managed to gain around 35 percent from lows hit in mid-March. In that same time period, Exxon Mobil and Chevron have both dropped more than 1 percent.
"When things improve in the industry, no one wants to be holding Exxon anymore," Gheit said in an interview on CNBC's "Fast Money." "It's like the bomb shelter. You don't go there to spend the rest of your life there, just temporarily until things quiet down."
Gheit called Exxon and Chevron "flight-to-quality" names, and said that as oil prices have rebounded, investors have started to favor growth over safety. Smaller cap companies tend to benefit the most from higher prices, as they are more nimble and more likely to achieve faster growth, he added.
According to Gheit, the only option for large companies searching for growth is to make acquisitions. In the past, periods of oil price slides have triggered waves of consolidation in the industry, several of which created the current incarnation of 'Big Oil'.
"Hopefully they would be able to cut costs and improve operating efficiency, and cannibalize some of the growth that they inherit from the companies they are buying," he said.
Gheit said the hunt for growth could lead to a wave of consolidation in the next 6 months, as large companies with financial flexibility look to take advantage of lower oil prices, which are still down nearly 50 percent from last year's highs.
According to Gheit, every single U.S. oil company could be a potential takeover target.
When asked specifically which deals could be on the horizon, Gheit said that "Exxon for all practical purposes could buy Shell or Chevron."
However, Gheit said there was one big road block could put any mega merger in jeopardy. "The question is will the regulators allow Exxon to do that, and it is really difficult."