EIA expects the price of crude to fall by the end of 2025

In the August Short-Term Energy Outlook (STEO), the EIA expects the Brent crude oil spot price to average less than US$60/bbl in the 4Q25 – the first quarter with average prices that low since 2020.

OPEC+ has announced that it will unwind its oil production cuts by September 2025, which is a year ahead of its previous schedule. For the first time since EIA began publishing an OPEC+ production forecast in 2023, EIA expects most global oil production growth to come from OPEC+ countries. EIA forecasts the supply growth will outpace demand, leading to quickly growing inventories.

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

EIA expects lower oil prices to lead to lower US retail prices for gasoline and diesel and to pull domestic oil production down from the record highs in 2025.

Other highlights from the August STEO include:

• Global oil prices: EIA expects the Brent crude oil price to decline from more than US$70/bbl in July to average about US$58/bbl in the 4Q25. Crude oil averages just above US$50/bbl in 2026 in EIA’s forecast.
• US crude oil production: EIA expects US crude oil production to average an all-time high, near 13.6 million bpd, in December 2025, driven by continued increases in domestic well productivity. By 2026, declining oil prices lead EIA to expect US producers will pull back on drilling and well completion activity – a trend that has continued through most of 2025. EIA forecasts US crude oil production will average 13.3 million bpd in 2026.
• US retail gasoline and diesel prices: EIA expects the declining oil prices to contribute to significantly lower prices for gasoline and on-highway diesel in 2026. EIA expects retail gasoline to average about US$2.90/gal. and on-highway diesel to average less than US$3.50/gal. in 2026. Both of those average price points are about US$0.20/gal. lower than in 2025.
• Uncertainties: All short-term forecasts are uncertain, but EIA’s petroleum forecasts are subject to heightened uncertainty related to supply-related risks. 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. The evolution of ongoing trade negotiations between the US and its trading partners could affect economic and oil demand growth, which would affect oil prices. Lastly, the potential for OPEC+ to revisit production plans given the expectations of significant oversupply beginning later in 2025 could affect future production and limit the downward pressure on oil prices.
• Natural gas prices: EIA continues to expect increases in US natural gas prices as production remains relatively flat and exports of liquefied natural gas increase. EIA expects the Henry Hub natural gas spot price will rise from an average US$3.20 per million Btu in July to almost US$3.60 per million Btu in the 2H25 and US$4.30 per million Btu in 2026.
• Trade policy assumptions: The US macroeconomic outlook EIA used in STEO is based on S&P Global’s macroeconomic model. S&P Global’s most recent model reflects the tariffs announced in April 2025 and includes the 90-day temporary suspension of tariffs granted to most countries. S&P Global forecasts reduced tariffs on imports from China compared with last month, but the model assumes tariffs on imports from other countries remain at 10% after the 90-day pause expired in July.

The full August 2025 Short-Term Energy Outlook is available on the EIA website.

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