Consumers could see relief at the gas pump, with industry experts forecasting a sharp decline in oil prices. According to S&P Global Commodity Insights, oil prices may drop below $50 per barrel, potentially falling as low as $40. Jim Burkhard, head of crude research at S&P Global, has revised his Brent crude price forecast downward from $72 to $63 per barrel, while West Texas Intermediate (WTI) crude could also dip into the $40 range.
The anticipated price drop reflects broader economic concerns. A potential slowdown in economic growth could reduce energy demand and drive investors toward safer assets like bonds. The risk of a U.S. recession further threatens to dampen economic activity and oil consumption. Burkhard emphasized that oil prices remain vulnerable due to an ongoing market oversupply unless production patterns shift significantly.
The primary driver behind the expected decline is the excess supply from OPEC and its allies. Global oil output is projected to increase by 2.2 million barrels per day in the second half of 2025, following an unexpected production boost of 411,000 barrels per day by OPEC+ in May. Meanwhile, global oil demand is stabilizing, with 2025 poised to record the lowest demand growth since 2001—excluding exceptional years impacted by the pandemic and financial crises.
The falling crude prices are expected to translate into lower gasoline costs for consumers. The U.S. Energy Information Administration (EIA) forecasts a 3% reduction in average retail gasoline prices in 2025 compared to 2024, with an additional 6% drop projected for 2026. The EIA’s summer 2025 outlook anticipates an average gasoline price of $3.10 per gallon, the lowest inflation-adjusted summer price since 2020.
However, reduced refining capacity in the U.S. could temper these gains at the pump. Planned refinery closures—including LyondellBasell’s Houston plant and Phillips 66’s Los Angeles facility—are expected to lower gasoline production, increasing reliance on imports. This tightening refining capacity will likely widen refining margins, known as “crack spreads,” throughout 2025.
Gasoline prices will also show regional variation. The Rocky Mountain region is expected to maintain stable prices, whereas the West Coast could see price hikes in 2026 due to diminished regional refinery output. Patrick de Haan of GasBuddy predicts nationwide gasoline prices will generally fall as oil prices reach their lowest levels since early 2021.
Lower oil prices may prompt U.S. drilling companies to scale back operations, potentially removing rigs from the market. U.S. oil production is forecast to decline by 640,000 barrels per day by the end of 2026 compared to mid-2025, marking the first production drop in nearly a decade. This reduction could have lasting effects on the domestic oil industry.
Despite a slight rise in U.S. gasoline consumption in 2025—offset by increased imports—consumption is expected to decline in 2026. This trend is driven by gains in vehicle efficiency, including a growing share of electric vehicles and improved fuel economy in traditional internal combustion engine cars. These shifts underscore the evolving dynamics of energy consumption in the United States.
