This means that the EIA is expecting a decline in gasoline prices over the next few years. They reduce their estimate of price increases by 11 cents in 2025 and 19 cents in 2026. These forecasts arrive as U.S. oil production hits all-time highs. By March 24, 2025, the spot price for West Texas Intermediate (WTI) fell to just under $70 per barrel. This pricing is the U.S. benchmark for crude oil. As gas prices hit a nationwide average of $3.10 per gallon, according to data from GasBuddy.
Several factors that lead to a decline in gasoline prices
Seasonal demand trends A major factor is the seasonal demand, and the recent record oil production in the U.S. In December 2024, U.S. oil and gas firms produced over 13.49 million barrels of crude per day, setting a new record for national production. Analysts at S&P Global Commodity Insights project that WTI will average $66 per barrel in 2025, further influencing gasoline prices.
Even with these optimistic predictions, oil producers are still struggling with the ups and downs of an unstable crude oil price market. When the Federal Reserve Bank of Dallas surveyed producers in March 2024, they disclosed that in order to make money at the end of drilling new wells, they are making less than $64 per barrel, the breakeven price they need to sell oil at. Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, commented on the situation:
"This is a real challenge to get oil prices at a level that producers are comfortable with, but also that consumers can live with," said Clark Williams-Derry.
Instead, President Donald Trump has prodded oil producers to ramp up drilling operations even further with his “drill, baby, drill” agenda. Lower oil prices hurt the profitability of oil and gas companies—which sell on global markets—tariffed or not. In 2023, the price of crude oil was responsible for roughly 52.6% of the average retail gasoline price.
It’s important to remember that historical price data indicates that gasoline prices have been even higher. The previous all-time nationwide average price in June 2022, which peaked at $5.016 per gallon. Overall, if the forecast holds true, U.S. consumers should expect to pay less at the pump over the next few years.