Gas Prices Expected to Fall to Lowest Levels Since 2020

Gas prices in the United States are projected to average just $2.97 per gallon in 2026, marking the lowest levels since the onset of the COVID-19 pandemic. According to forecasts from the fuel savings platform GasBuddy, this decline would represent the fourth consecutive year of falling prices at the pump and the first annual average below $3 since 2020. This positive trend comes despite ongoing uncertainties in the global oil market, particularly concerning Venezuela.

The forecast from GasBuddy, shared exclusively with CNN, offers a significant contrast to the turbulent gas prices witnessed in 2022. That year, the impact of Russia’s invasion of Ukraine sent gasoline prices soaring above $5 per gallon for the first time. The subsequent inflation crisis saw the U.S. inflation rate exceed 9%.

“Now things are looking pretty good. We’re finally out of the woods with the market rebalancing after COVID,” stated Patrick De Haan, GasBuddy’s head of petroleum analysis. He emphasized that the situation in Venezuela, which recently experienced U.S. military intervention, is unlikely to alter the positive outlook for gas prices significantly. De Haan noted, “In the short term, we see little disruption or shift as a result of the events over the last few days.”

Projected Savings and Regional Variations

If GasBuddy’s predictions hold true, Americans could spend $11 billion less on gasoline in 2026 compared to 2025, translating to an average household expenditure of $2,083 on fuel for the year. This figure represents a decrease from $2,716 in 2022. Furthermore, ten states are forecasted to enjoy average gas prices below $2.75 per gallon, including Alabama, Arkansas, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee, and Texas.

GasBuddy anticipates that prices will peak at $3.12 per gallon in May, as the transition to more expensive summer fuel occurs alongside increased demand. By year-end, prices are expected to drop further to an average of $2.83 per gallon.

Factors Contributing to Declining Prices

The downward trend in gas prices is linked to a significant decrease in oil prices worldwide. In 2025, oil prices fell by 20%, marking the largest annual decline since 2020. According to the U.S. Energy Information Administration, U.S. oil prices are projected to average just $51 per barrel this year, down from $65 in 2025 and $77 in 2024.

De Haan attributes this reduction to a robust supply of oil rather than diminished demand. “Prices aren’t being driven by a lack of demand but by an increase in supply across the board,” he explained. The increase in supply has been largely influenced by the Organization of the Petroleum Exporting Countries (OPEC), which raised output significantly in 2025, responding to pressure from the U.S. administration.

Despite the current optimism, some U.S. oil companies are beginning to adjust their drilling plans in response to low prices. Federal data indicates that U.S. oil production is expected to decline by 100,000 barrels per day to an average of 13.5 million barrels per day in 2026.

“Motorists should be careful about cheering for low prices to continue because eventually U.S. oil production will falter, handing more market share to OPEC,” De Haan cautioned.

While the forecast for lower gas prices appears promising, several unpredictable factors could jeopardize this outlook. For instance, if the U.S. intervention in Venezuela leads to wider regional instability, energy prices could rise. Additionally, the ongoing conflict between Russia and Ukraine continues to threaten energy infrastructure, with reports of Russian facilities being targeted by Ukrainian drones.

Another potential risk is that OPEC may shift its strategy from increasing production to reducing output in response to low prices. Despite these uncertainties, current expectations suggest that gasoline will remain a bright spot for consumers amid rising costs in other sectors, including groceries and utilities.