Declining fuel prices expected » Land Line Media

Fuel prices have not been affected by tariffs or global unrest in the same way other energy markets have been recently.

Will that trend continue?

In its August short-term energy outlook, the Energy Information Administration said lower oil prices will lead to lower fuel prices in 2026.

Energy markets, including petroleum, were more volatile in the second quarter of 2025. Economic concerns, geopolitical tensions in the Middle East and shifting government policies have caused uncertainty, EIA said.

“There’s a lot of uncertainty in the petroleum market,” said EIA Acting Administrator Steve Nalley. “In the past, we have seen significant drops in oil price when inventories grow as quickly as we are expecting in the coming months.”

OPEC+ unwinding its production cuts ahead of schedule will lead to growth outpacing demand, EIA said. Additionally, domestic oil production will decline from record highs in 2025 and average 13.3 million barrels per day in 2026.

Brent crude oil is forecast to average $60 per barrel in the fourth quarter of 2025, the lowest average since 2020.

Diesel prices will average around $3.70 per gallon in 2025, a 3% decrease from 2024, EIA said. In 2026, that average is forecast to decline another 5% and average $3.47 per gallon in 2026.

EIA’s weekly fuel report, released on Monday, Aug. 11, indicated a 4.6-cent decline in the national average price per gallon from the previous week. This was the fourth consecutive week of a decline in the national average.

Fuel prices are updated daily on this Land Line resource page.

EIA said supply-related risks add a level of uncertainty to its petroleum forecasts.

“A break in the Israel-Iran ceasefire and elevated tensions or additional sanctions related to the Russia-Ukraine conflict could affect supply and could offset the supply growth from non-OPEC countries,” EIA said. “The evolution of ongoing trade negotiations between the United States and its trading partners could affect economic and oil demand growth, which would affect oil prices.”

The full EIA short-term outlook is available online. LL

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