How low will US gas prices get in 2026?

OPEC+ has extended its overarching Framework of the Declaration of Cooperation (DoC) until the end of 2026. This decision was reaffirmed at meetings in November 2025, January 2026, and April 2026 ^[1]. The framework includes provisions for individual voluntary production adjustments by several participating countries, which were also formally extended to remain in effect until the end of December 2026 ^[1]. However, the specific levels of these adjustments were modified in 2026, with Saudi Arabia and Russia leading an increase in oil production by more than 600,000 barrels per day (bpd) in May 2026 ^[2]. This output boost was influenced by recovering global demand and efforts to stabilize crude prices, with discussions also including a potential further increase if the Strait of Hormuz reopens ^[2].

Key OPEC+ members consistently reaffirm commitment to market stability and policies. Members such as Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman have consistently reaffirmed their dedication to market stability and adherence to collective decisions ^[3]. They cite healthy oil market fundamentals and a steady global economic outlook as reasons for their commitment ^[3]. While specific compliance forecasts are not detailed, these repeated affirmations, along with the demonstrated flexibility in adjusting production—as evidenced by the May 2026 production increase—suggest an intent to uphold agreed-upon policies and proactively manage supply and demand ^[2]. The ongoing dialogue through various ministerial meetings further underscores their collective effort ^[4].

US shale producers project moderated crude oil production growth for 2026. Based on Q4 2025 earnings calls and capital expenditure guidance, major US shale producers operating significantly in the Permian Basin anticipate continued but tempered expansion. EOG Resources, with a 2026 capital plan of $7.0 to $7.4 billion, projects a crude oil production increase of approximately 3-5% ^[1]. Occidental Petroleum guided capital expenditures between $5.8 billion and $6.2 billion for its Permian operations, expecting a modest crude oil production increase of roughly 2-3% from its US operations in 2026 ^[3]. ConocoPhillips reported a 2026 capital program of $11.0 to $11.5 billion, investing significantly in its Lower 48 plays, including the Permian, and forecasts US crude oil growth of approximately 1-2% ^[4]. Exxon Mobil plans 2026 capital expenditures between $23 billion and $25 billion, projecting an overall upstream production increase of about 100,000 to 200,000 barrels of oil equivalent per day, with a substantial portion attributed to the Permian Basin ^[5]. Collectively, these leading producers' guidance suggests individual crude oil production growth for their US operations will generally fall within the 1% to 5% range for 2026.

Producer projections broadly align with the IEA's medium-term growth forecasts. The International Energy Agency's (IEA) March 2026 Oil Market Report projects the US will add approximately 0.6 million barrels per day (mb/d) to its total liquids supply in 2026, primarily driven by Permian crude oil, translating to an overall US crude oil production growth rate of around 4% ^[2]. The April 2026 report reiterates this outlook, anticipating US crude oil production growth of approximately 0.5 mb/d in 2026, which corresponds to an annual growth rate of roughly 3.5% ^[6]. While individual producer percentage growth guidance shows some variation, the collective trend from these key Permian players, particularly EOG's 3-5% and Occidental's 2-3%, contributes to an outlook consistent with the IEA's forecast of mid-single-digit percentage growth for US crude oil in 2026.

The United States refinery capacity is projected to see a net reduction by 2026. This decline is primarily driven by planned closures and limited new additions. As of January 2025, the operable atmospheric crude distillation unit (ADC) capacity across U.S. refineries stood at 17.7 million barrels per day (b/d) ^[1]. This figure reflects a decrease of 200,000 b/d observed between January 2020 and January 2024 ^[2]. Notable contributions to this trend include closures such as LyondellBasell's Houston refinery in December 2023 ^[3]. The U.S. Energy Information Administration (EIA) anticipates that these facility shutdowns, combined with increasing consumption, will result in reduced U.S. petroleum inventories in 2026, indicating a tightening of effective refining capacity relative to demand ^[3].

Refinery utilization rates are forecast to remain robust despite capacity reductions. Despite the expected decrease in crude distillation capacity, the EIA predicts higher refinery runs through 2026, particularly for increased distillate fuel oil production ^[3]. This sustained operational intensity is driven by continued export demand and favorable crack spreads ^[3]. U.S. refinery utilization has been near multi-year seasonal highs ^[4], with refineries preparing for maintenance in anticipation of a busy year in 2026, signaling high operational expectations ^[5]. This combination of reduced capacity and consistently high utilization is expected to significantly impact the gasoline 'crack spread', with a bullish outlook for refined oil product cracks in 2026 ^[6]. Consequently, tighter refining capacity and strong demand are anticipated to support elevated gasoline 'crack spreads' in 2026 ^[3].

US EV adoption slowed in 2025, with sales declining. The pace of US electric vehicle (EV) adoption saw a shift in 2025, marked by a decline in new EV sales while hybrid vehicle sales continued to rise ^[6]. Overall EV sales for 2025 experienced a 2% decrease compared to 2024, indicating a moderation from previous growth rates ^[1], ^[2], ^[3]. This slowdown in new registrations affects the incremental contribution of new EVs to gasoline demand displacement, though the existing and expanding cumulative fleet of electric vehicles still contributes to overall demand reduction ^[7].

EIA forecasts 2026 gasoline demand destruction, citing multiple factors. The U.S. Energy Information Administration's (EIA) official forecast for US gasoline demand destruction in 2026, detailed in its Annual Energy Outlook 2026, incorporates these market dynamics ^[8], ^[9]. The EIA anticipates lower gasoline prices in 2026 and 2027, primarily driven by falling crude oil prices ^[4]. Decreasing gasoline consumption is attributed by the EIA to two main factors: increasing overall vehicle fuel efficiency and the growing number of electric vehicles on the road ^[4], ^[5]. While the 2025 dip in new EV sales might temper the rate of gasoline demand destruction from newly purchased EVs, the cumulative impact of the expanding EV fleet combined with continuous improvements in fuel efficiency remains a significant contributor to the projected reduction in finished motor gasoline consumption for 2026 ^[4], ^[5], ^[10].

A new administration will swiftly streamline energy production permitting by 2026. Following the 2024 US Presidential election, an incoming administration focused on domestic energy production is anticipated to implement policies expanding fossil fuel development. A key action expected is an Executive Order titled "Unleashing American Energy," slated for January 2025, designed to streamline permitting processes for oil, gas, and coal projects. This order aims to reduce regulatory hurdles, affecting the timeline and approval of drilling permits and new energy infrastructure into and throughout 2026 ^[4]. The formalization and implementation details of these energy deregulation policies, particularly regarding drilling permits, are expected to be published in documents like the Federal Register, with specific entries noted for April 23, 2026, and other dates in 2025 ^[3].

Fuel tax adjustments are possible depending on market conditions. An incoming administration may also consider changes to fuel taxes in response to potential market fluctuations. For instance, former President Trump indicated in March 2026 that he might suspend the federal gas tax if faced with soaring oil and gas prices ^[2].