Gas prices set to fall further in 2026
American drivers can expect continued relief at the pump this year, with forecasters projecting 2026 will deliver the cheapest gasoline prices since the Covid-19 pandemic disrupted global energy markets.
According to GasBuddy, gasoline prices are projected to average just $2.97 per gallon nationally in 2026. If accurate, this would mark the fourth consecutive year of declining pump prices and the first time the annual average has fallen below $3 since 2020.
Oil prices driving the decline
The primary driver behind lower gasoline prices is the persistent weakness in crude oil markets. The U.S. Energy Information Administration (EIA) expects US oil prices to average just $51 per barrel this year, down from $65 in 2025 and $77 in 2024.
Crude oil currently trades around $57.85 per barrel for WTI and $61.35 for Brent, both benchmarks showing slight declines in early January trading.
Global oversupply concerns
A report from the State Bank of India projects that Brent crude could decline to around $50 per barrel by June 2026, citing growing concerns about global oversupply.
OPEC has been steadily managing output while non-OPEC producers, particularly in the United States, continue to pump at elevated levels. The result is a market on pace to experience a supply glut throughout 2026.
What it means for consumers
For the average American household, lower gas prices translate directly to savings:
- At $2.97/gallon vs $3.3/gallon (2024 average), a driver using 1,000 gallons per year saves approximately $530 annually
- Lower fuel costs reduce transportation expenses across the economy
- Reduced energy costs may help ease broader inflationary pressures
Risks to the forecast
Several factors could push prices higher than forecast:
- Escalation of geopolitical tensions, including the ongoing situation in Venezuela
- Unexpected OPEC+ production cuts
- Stronger-than-expected global demand, particularly from China
- Hurricane disruptions to Gulf Coast refining capacity
Despite these risks, the current market structure and supply outlook suggest consumers will continue to benefit from relatively low fuel prices throughout 2026.