2026 Gas Price Forecast
National average gas prices are projected to reach $2.97 per gallon in 2026, according to forecasts from the fuel savings platform GasBuddy. This would mark the fourth consecutive year of declining prices at the pump and the first time the annual average has fallen below $3 a gallon since 2020.
Historical Context and Current Outlook
In 2022, gasoline prices exceeded $5 a gallon following Russia’s invasion of Ukraine, contributing to a US inflation rate that surpassed 9%. Patrick De Haan, GasBuddy’s head of petroleum analysis, indicated that the market has rebalanced post-Covid. He stated that recent events involving a US strike on Venezuela and the capture of President Nicolas Maduro are not expected to significantly alter the price outlook in the short term, as rebuilding Venezuela's energy infrastructure would require considerable time. Oil futures showed minimal change following the US intervention in Venezuela.
Household Spending and Regional Projections
Americans are forecast to spend $11 billion less on gasoline in 2026 compared to 2025. This translates to an average household expenditure of $2,083 on gas for the year, a decrease from $2,716 in 2022. Ten US states are projected to experience annual average gas prices below $2.75 per gallon:
- Alabama
- Arkansas
- Kansas
- Louisiana
- Mississippi
- Missouri
- Oklahoma
- South Carolina
- Tennessee
- Texas
Seasonal Price Trends
GasBuddy anticipates that monthly gas prices will peak at $3.12 a gallon in May. This increase is typically associated with the seasonal transition to more expensive summer fuel blends and heightened demand. By the end of 2026, prices are expected to decline to an average of $2.83 a gallon.
Factors Influencing Price Declines
The downward trend in gas prices, which saw the US annual average drop to $3.10 a gallon in 2025, is primarily driven by lower global oil prices. In 2025, oil experienced a 20% reduction in value, marking its largest annual decline since 2020 and completing four consecutive quarters of losses, the longest such period since late 2001.
Oil Production and Supply Dynamics
The US Energy Information Administration (EIA) projects US oil prices to average $51 a barrel in 2026, a decrease from $65 in 2025 and $77 in 2024. De Haan attributed the lower prices to an overall increase in supply rather than a reduction in demand. OPEC, led by Saudi Arabia, notably increased its output in 2025. US oil production reached 13.83 million barrels per day in late December, close to the all-time high of 13.86 million in early November.
However, current low prices are prompting some US oil companies to scale back drilling operations. Federal data indicates that US oil production is expected to decrease by 100,000 barrels per day, averaging 13.5 million in 2026. De Haan cautioned that a sustained period of low prices could eventually lead to a decline in US oil production, potentially increasing OPEC's market share.
Potential Risks to the Forecast
Several factors could affect the forecast for low oil and gasoline prices:
- Regional instability potentially arising from the US strike on Venezuela.
- Ongoing attacks on Russian energy infrastructure during the Russia-Ukraine conflict.
- Potential targeting of US troops in the Middle East by Iranian officials, should Washington intervene in Iranian protests.
- A shift in OPEC's strategy, moving from increased production to output cuts to counter low prices.