2025 is expected to herald the dawn of a new age in global energy markets. Market conditions, geopolitical events, and government policies will impact energy prices.

Oil and gas prices are heavily affected by myriad factors, and their pricing, in turn, impacts overall economic activity.

Supply and demand constraints directly affect pricing, with excess supply reducing prices and excess demand increasing prices. The unpredictability of fuel prices is the only certainty market participants have come to expect.

With extreme weather possibilities, decisions taken by OPEC (Organization of Petroleum Exporting Countries), and a new energy agenda championed by President-elect Donald J. Trump, the tide can shift dramatically.

Consumption Patterns Designed to Reduce Fuel Costs

Gasoline prices have been persistently high for several years, notably during the post-COVID years when prices stayed well above $3.30 per gallon.

While various options abound, notably legislative efforts to advance proposals for suspending state gas taxes, these have not gained ground at a federal level. Combined, state and federal gas taxes comprise 15% of the total retail price of gasoline.

Structurally, the catalyst behind rising gas prices is constrained US supply. With the Republicans in control, American energy independence is going to go into overdrive.

By boosting the domestic oil supply, consumption needs can be met, and prices lowered. Other measures to reduce gasoline consumption include electric vehicle mandates, removing the ban on E-15 gasoline, and nationwide changes in consumer-oriented behavioral practices.

For example, carpooling and using valuable future-tech resources like a receipt app can help drive down costs over time.

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These cost-saving resources can reduce gas and food costs over time through incremental cashback savings. Customers can leverage technology to cut down on costs with authentic cash back.

Gas stations have partnered to ensure cashback opportunities for shoppers.

For businesses, the benefits are equally appealing, including convenient, effective marketing, brand loyalty, repeat business, and stronger connections to local communities.

Beyond the micro level, there are also macroeconomic events impacting the prices of fuel.

Geopolitical Events Impact Fuel Prices

Understandably, the global conflicts have been sending oil and gas prices into the stratosphere.

In 2024, Brent crude oil prices dropped dramatically, averaging $74 p/b during September. This marked a six-dollar decline from August.

Understandably, the decrease directly resulted from fear-mongering in the markets, with analysts anticipating a drop in demand worldwide.

Global production of liquid fossil fuels is expected to ramp up by 2 million b/p/d in 2025, yielding an increase of 1.3 million b/p/d.

The United States of America is the world’s largest provider of crude oil by a long margin. It features a daily production average of 12.9 million b/p/d—a record-shattering number.

What Are Energy Industry Experts Anticipating?

Analysts expect the demand for crude oil to increase, and the competition for natural gas will likely grow over the next five years.

Many states across the US are switching from crude oil to natural gas to lower heating bills during bitterly cold winters.

These include the Garden State – New Jersey – and Connecticut, the Constitution State. Natural gas burns cleaner than petroleum, and the move towards clean energy continues.

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As far as forecasts go, the fuel price for 2025 is expected to yield the following figures:

Heating fuel 

At a forecast price of $3.50 per gallon, heating fuel is needed for furnaces. Approximately 4% of US households use this fuel, which is primarily based in the northeast of the country.

Diesel fuel 

Most trains and trucks are powered by diesel. The EIA anticipates retail prices of diesel at just $2.30 per gallon in 2025.

Propane 

11 million American households use propane as a primary fuel source, and 42 million Americans use it for outdoor grilling. At $2.40, propane is a valuable energy resource with outsized potential.

Fuel Prices and the Shifting Energy Landscape of 2025

The energy landscape in 2025 is poised for significant shifts, driven by geopolitical events, evolving government policies, and market conditions.

The rise of renewable energy sources and advancements in energy storage technology are also playing a pivotal role in shaping the future of oil prices.

Governments and companies are increasingly focusing on sustainability, which could reduce reliance on traditional fossil fuels and influence market dynamics.

Furthermore, consumer behavior, such as the growing popularity of energy-efficient appliances and vehicles, will continue to drive demand for cleaner, more cost-effective energy solutions.

While fuel prices remain volatile, factors such as increased domestic production, the adoption of alternative energy sources like electric vehicles, and technological innovations offer potential for cost reduction.

Geopolitical tensions and the growing demand for natural gas further complicate price predictions, but advancements in energy independence and cleaner energy solutions point to a dynamic and transformative period ahead.

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The ability to adapt to these changes will be crucial for both consumers and businesses in managing future energy costs.