The Energy Information Administration (EIA) has revised upward its gasoline price forecast for 2027, projecting retail prices to reach $3.73 per gallon, representing a 5% increase from the agency's previous month's outlook of $3.56 per gallon [1]. Despite this upward revision, consumers should still experience relief compared to 2026 levels, when gasoline averaged $3.89 per gallon [1]. The EIA attributes the price pressures to continued global petroleum supply constraints expected through the end of 2027, noting that "crude oil prices rose for the third consecutive month in October due to falling inventories, attacks on oil tankers in the Persian Gulf, constrained shipping capacity and higher transportation costs" [1].
Diesel prices face similar upward pressure, with the EIA forecasting retail diesel at $5.03 per gallon in 2027, up from its prior estimate of $4.49 per gallon but still below the $5.25 per gallon consumers faced in 2026 [1]. The agency expects these market conditions to "support wider petroleum crack spreads next year and incentivize elevated U.S. refinery operations" [1]. Regarding crude oil benchmarks, Brent crude is expected to remain near $100 per barrel for the remainder of 2026 before gradually declining to an average of $77 per barrel in the fourth quarter of 2027 [1].
Current market conditions show some near-term relief, with consumer gas prices dropping below $4 per gallon for the first time since July, reaching $3.97 per gallon according to AAA data, and further declining to $3.94 per gallon by Wednesday—down approximately 18 cents from a week prior and 41 cents from a month ago [1]. The EIA's forecast anticipates that "most Middle East production outside Iran" will return to pre-conflict averages by mid-2027, which could provide additional supply relief [1].
CONCLUSION
The EIA's upward revision of 2027 gas price forecasts reflects persistent global supply constraints and geopolitical tensions, though projected prices remain below 2026 levels, offering consumers modest relief. Current downward price momentum suggests near-term consumer benefit, but the forecast indicates sustained elevated energy costs through 2027 as supply normalization remains gradual.