Despite Venezuela, forecasters say 2026 will be the cheapest year for gas since Covid
By Matt Egan, CNN
New York (CNN) — The gas pump has emerged as a rare source of relief for Americans drowning in higher prices — and that positive trend is expected to continue in 2026, regardless of the uncertainty in Venezuela.
Gas prices are projected to average just $2.97 a gallon nationally this year, according to forecasts from fuel savings platform GasBuddy.
If that forecast, shared first with CNN, proves accurate, 2026 will be the fourth straight year of falling prices at the pump and the first with the annual average below $3 a gallon since 2020.
It’s a far cry from 2022, when the gas pump was ground zero in the inflation crisis. After Russia’s invasion of Ukraine catapulted oil prices, gasoline spiked above $5 a gallon for the first time ever and the US inflation rate surpassed 9%.
“Now things are looking pretty good. We’re finally out of the woods with the market rebalancing after Covid,” said Patrick De Haan, GasBuddy’s head of petroleum analysis.
GasBuddy compiled its forecast prior to the sudden US strike on Venezuela and capture of President Nicolas Maduro. However, De Haan told CNN on Sunday that the situation in Venezuela does not change his upbeat outlook for prices because it will take considerable time to rebuild the nation’s decaying energy infrastructure.
“In the short term, we see little disruption or shift as a result of the events over the last few days,” he said.
Indeed, oil futures were little changed Sunday night after trading began following the US intervention in Venezuela.
The GasBuddy forecast for 2026 offers a powerful counterweight to the affordability concerns that have crushed consumer confidence and sent President Donald Trump’s poll numbers plummeting.
Other costs continue to rise rapidly, including some grocery store items as well as electricity and home heating.
Where gas is likely to be the cheapest
Americans are expected to spend $11 billion less at the gas pump than they did in 2025, according to GasBuddy. That would translate to an average household spending of $2,083 on gas for the year, down from $2,716 in 2022.
And 10 US states are forecast to enjoy yearly average gas prices of less than $2.75 per gallon: Alabama, Arkansas, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee and Texas.
GasBuddy expects gas prices to peak on a monthly basis at just $3.12 a gallon in May as stations switch over to more expensive summer fuel and demand heats up. By the end of the year, gas is seen falling to an average of just $2.83 a gallon.
Why pump prices are falling
Gas prices were also a source of relief during the inflation crunch in 2025, with the US annual average dropping to just $3.10 a gallon. The downward trend is because oil has been cheap worldwide.
In 2025, oil lost 20% of its value, the biggest annual drop since 2020. Crude prices have declined four quarters in a row, the longest quarterly losing streak since the end of 2001, according to FactSet data.
US oil prices are expected to average just $51 a barrel this year, down from $65 in 2025 and $77 in 2024, according to the US Energy Information Administration.
De Haan said he does not see relatively cheap oil and gasoline as a harbinger of economic trouble because fuel demand remains solid.
“Prices aren’t being driven by a lack of demand but by an increase in supply across the board,” he said.
That supply increase has been caused in large part by Saudi Arabia-led OPEC, which sharply hiked output in 2025 under pressure from Trump. And supply from the United States remains strong, although Trump’s “drill, baby, drill” strategy has yet to spark the gangbusters growth he promised.
US oil production totaled 13.83 million barrels per day during the week that ended on December 26, according to preliminary estimates from the EIA. That’s just shy of the all-time high of 13.86 million in early November and up slightly from 13.48 million at the end of the Biden administration.
Of course, low prices are already causing some US oil companies to scale back drilling plans. US oil production is expected to dip by 100,000 barrels per day to an average of 13.5 million in 2026, according to federal data.
“Motorists should be careful about cheering for low prices to continue because eventually US oil production will eventually falter and that will hand more market share to OPEC,” said De Haan.
What could go wrong
As always, wildcards could emerge to wreck the forecast for cheap oil and gasoline this year.
For instance, if the US strike on Venezuela leads to broader regional instability, it could drive up energy prices. And as the Russia-Ukraine war lingers, Russian energy infrastructure continues to be attacked by Ukrainian drones.
Iranian officials also warned in recent days that US troops in the Middle East could be targeted if Washington interferes with deadly protests in Iran.
Another risk is that OPEC reverses course and pivots from ramping up production to cutting output to combat low prices.
Still, for now the expectation is that gasoline will remain a bright spot amid affordability woes.
The-CNN-Wire
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