After years of stubborn pain at the pump, gas prices are on the verge of hitting $3 per gallon — a threshold Americans haven’t seen since May of 2021. According to a fresh report from AAA, national gas prices are sliding fast, landing at $3.05 last week and potentially dropping further as oil supply floods global markets.
The core driver? A sharp decline in crude oil prices, with West Texas Intermediate (WTI) futures now trading around $57 per barrel — a dramatic drop fueled by ballooning supply and cooling global tensions.
This isn’t just a fluke. The downward trend is being propelled by a convergence of favorable factors: lower seasonal gasoline demand, the arrival of cheaper winter-blend fuel at pumps, and — most significantly — an oil market that’s awash in surplus.
According to the Energy Information Administration (EIA), crude now accounts for 51% of the cost of a gallon of gas. So when oil prices plunge, consumers see direct relief.
Energy analyst Andy Lipow calls it a “glut”, and the numbers back him up. OPEC+ nations have been phasing out their voluntary production cuts, and U.S. output has soared to record highs — over 13.6 million barrels per day. Add to that new production surging from Brazil, Guyana, and Argentina, and you have a market that’s swelling faster than global demand can absorb.
The EIA projects oil supply to increase by 3 million barrels per day in 2025 — while demand climbs by only 700,000 barrels. The result? Tankers filled with crude have begun idling offshore in floating storage, waiting for buyers.
Lipow believes we could see $3 gas within days.
But there’s also a political dimension. FOX Business contributor and Price Futures Group analyst Phil Flynn credits President Donald Trump’s rapport with OPEC for influencing the group’s willingness to ramp up production more aggressively.
That diplomatic channel, along with a recent calming of tensions in the Middle East, has added stability to the market. Oil traders, notoriously skittish about geopolitical flare-ups, have responded by easing off speculative pressure.
Looking ahead, the EIA projects that average gas prices will hold near $3.10 through the end of the year, with a further drop to $2.90 by 2026. If these forecasts hold, it would mark a significant reversal from the steep prices that gripped the country in recent years.
