Oil prices will start to drop slowly in June and the decline will pick up speed by the close of the year, according to the United States Energy Information Administration. With international pressure expected to open the Strait of Hormuz, oil production is expected to rise in the Arab states. China agreed to work with the United States to free access to the Straits during last week’s summit with President Donald Trump.
With the exception of California, the United States is much less dependent on Straits of Hormuz shipping than China at this point.
The EIA states that “large inventory draws” in May and June will interfere with the natural downward pressures on the price of oil, and by extension the price of gasoline. While Brent prices will remain slightly above $100 a barrel through June, prices are expected to dip to $89 a barrel by the fourth quarter of this year and below $80 early in 2027.
The price of West Texas Intermediate crude oil is predicted to drop even faster, hitting $80 by the fourth quarter and stabilize around $70 by the end of 2027.
Gasoline prices generally rise along with the price of oil, but lag behind drops in crude oil prices. Gasoline prices are based on the expectation of future cost and demand, not current conditions.
Additionally, the conflict in Iran has created a reorientation of the global oil and shipping economy away from Iran and toward the Arab states and the United States.
The United States is the largest producer of crude oil in the world.
United States natural gas production will continue to rise through the end of the year, shared the EIA. As the EIA reports, the United States hit a record high production in energy last year with 107 quadrillion British thermal units, 3.4 percent higher than 2024.
Production of “dry” natural gas hit a record high of 39 billion cubic feet in 2025, rising more than four percent from the previous year. Appalachian production, as well as Permian and Haynesville fields, accounted for the continued rise.
Since 2011, the United States has been the top worldwide producer of natural gas.
Natural gas production nationwide rose four percent from the first quarter of 2025 to that of 2026. The EIA states that “we expect production to keep rising through 2027” as the high price of crude oil pushes higher production of that product. The Permian and Haynesville regions have seen six percent growth.
Liquefied Natural Gas export capacity expanded by 0.9 billion cubic feet per day with new port facilities coming online. The EIA states, however, that expansion of such facilities face “long lead times” that will “constrain growth in the US.”
Production of natural gas plant liquids grew seven percent to a record four trillion cubic feet in 2025, accounting for nine percent of domestic energy production
The EIA shared that it expects “incremental” growth in natural gas use by industry, saying “increases in industrial activity are partially offset by efficiency gains” that “reduce the amount of natural gas needed per unit of output.” The chemicals subsector, including the production of hydrogen fuel and fertilizer, is the largest industrial natural gas consumer.”
Efficiencies, say the EIA, come from the adoption of “more efficient process heaters” and “heat recovering technologies” that tap into the heat of exhaust or other byproducts. “Waste heat recovery can improve energy efficiency 10 to 50 percent,” says an EIA study.
Energy-intensive industries, such as those producing glass and metals, have the highest potential for efficient uses of waste heat.
These factors, say the EIA, will contribute to the “natural gas-weighted manufacturing index to increase by 1.5 percent in 2026 and 0.7 percent in 2027.”
