The Energy Information Administration—those famously unexcitable federal bean-counters—has wandered into the room with a wet blanket and a calculator, and the news is not what the oil bulls or the “drill, baby, drill” crowd want to hear.
According to the latest Short-Term Energy Outlook from the Energy Information Administration, U.S. “light sweet” crude is on track to sink below $50 a barrel later this year and stay down through 2027. Not crash-and-burn cheap, but cheap enough to make shale executives start using words like discipline and capital restraint again.
West Texas Intermediate, the oil that trades at Cushing, Okla., and gets treated like it’s the mood ring of the global economy, is expected to average about $52 a barrel in 2026. That’s actually a small upgrade from December, but don’t get too excited. The EIA expects prices to slide steadily, dropping below $50 by the end of the year and bottoming out around $49 in early 2027.
In other words: enjoy the mid-$50s while they last.
Brent crude, the international benchmark that everyone pretends isn’t political until it absolutely is, isn’t doing much better. The EIA sees Brent averaging roughly $56 in 2026 and about $54 in 2027—numbers that don’t exactly scream “drill, baby, drill.”
Why the slump? Because the world is drowning in oil.
Global production keeps rising faster than consumption, thanks largely to OPEC+ opening the taps in 2026 and non-OPEC producers—especially in South America—doing the same in 2027. The EIA now expects global output to hit nearly 108 million barrels per day by 2027, while demand continues to lag behind.
That gap matters. In 2026, the global surplus is projected at almost 3 million barrels a day. It shrinks a bit in 2027, but it doesn’t go away. And when supply outruns demand, prices tend to behave badly—at least if you’re a producer.
Back home, U.S. oil production is expected to slip slightly from its 2025 record. Not because America has forgotten how to drill, but because companies are slowing activity faster than productivity gains can compensate for it. By 2027, U.S. output is projected to fall to about 13.25 million barrels per day.
There’s also no cavalry riding to Caracas. The EIA assumes U.S. sanctions on Venezuela stay in place through 2027, which means no sudden flood of sanctioned crude swooping in to “fix” the market—or justify some overheated geopolitical talking points.
So if you’ve been told oil prices are about to skyrocket because reasons, the government’s own numbers suggest otherwise. Too much oil, not enough demand, and a market that stubbornly refuses to obey political slogans.
It’s not dramatic. It’s not cinematic. But it’s how supply and demand still work—no matter how many speeches get made pretending they don’t.
And just to put a number on all this hand-waving, the EIA says the quiet part out loud: gasoline prices in 2026 are expected to average a little over $2.90 a gallon, about 20 cents cheaper than 2025, with 2027 staying right about there.
Which means no apocalypse, no miracle, no grand energy awakening—just slightly cheaper gas and one less excuse for politicians to shout at each other on cable news. Sometimes boring is the good news.
Of course, when prices drift down, someone in Washington will take a victory lap. That’s tradition. The current administration will say it made this happen—through strength, toughness, wisdom, and probably a chart waved around at a podium. But oil markets don’t salute presidents. They respond to supply, demand, drilling decisions made years ago, and producers half a world away who’ve never heard the speech.
Politicians come and go. Oil does what it wants.