How did global oil market events between 2021 and 2025 affect U.S. pump prices?

1. Supply surge and the making of a 2025 glut

Non-OPEC+ producers—led by the United States, Canada, Brazil and Guyana—added substantial volumes that, together with OPEC+ unwinding some cuts, pushed world supply to record levels and set the scene for an oversupplied 2025 market ^{[6] [5] [7]}. The World Bank and IEA both flagged production growth outpacing demand—World Bank projected Brent near $64/b in 2025 and IEA documented global supply rising to record highs—signaling an expected surplus and elevated inventories ^{[3] [5]}.

2. How forecasters translated that oversupply into lower crude prices

The U.S. Energy Information Administration (EIA) revised its outlook downward: it forecast Brent at $74/b in 2025 and $66/b in 2026, and in later updates even lower near $62/b for late‑2025 and into the low $50s by 2026 in some scenarios—explicitly tying those moves to inventory growth from rising production ^{[1] [8]}. Independent analyses from McKinsey and other market trackers reported Brent trading in the mid‑$60s through 2025, consistent with the narrative of plentiful supply depressing prices ^{[4] [9]}.

3. Why lower crude didn’t equal proportionally lower U.S. pump prices

The EIA cautioned that falling crude prices do not lead to proportional drops at the pump because crack spreads—the margin between wholesale product prices and crude—can widen and absorb some of the crude price gains, muting retail gasoline declines ^[2]. The EIA explicitly forecasts retail gasoline prices falling (for example citing projections like $3.20/gal in 2025 in commentary), yet it notes refinery and product-market dynamics can delay and reduce pass‑through ^{[10] [2] [1]}.

4. Refinery runs, seasonal maintenance and regional frictions

IEA reporting shows refinery throughputs and runs moved seasonally—record throughputs earlier in 2025 then falls during maintenance—affecting product availability and crack spreads regionally ^{[6] [11]}. McKinsey documented OPEC+ production moves and policy actions (tariffs, price caps) that altered flows and market sentiment, underscoring that refinery and trade frictions can keep pump prices elevated even when crude weakens ^[4].

5. Geopolitics, sanctions and policy complications that muddied the signal

Markets faced sanctions, price caps and trade measures—e.g., on Russian crude—and uncertainty around their effectiveness. EIA noted sanctions’ uncertain impact: they could tighten markets if Russian barrels are sidelined or have limited tightening if redirected, which factors into price-risk assumptions ^{[10] [2] [8]}. World Bank and IEA analyses similarly listed downside and upside risks to the price outlook tied to geopolitics and demand softness ^{[3] [7]}.

6. Demand trends: moderation, EV adoption and the “peak demand” question

Multiple analysts flagged demand growth as tepid: global demand growth in 2025 was described as sluggish relative to pre‑pandemic norms, with structural factors—like faster EV penetration in China and slower OECD growth—contributing to a flatter demand path that amplified the supply surplus ^{[3] [12] [7]}. The New York Fed’s Liberty Street Economics framed the risk of peak or plateauing demand, a longer‑term headwind to oil prices ^[12].

7. What that meant for U.S. consumers — short and medium term

Synthesizing EIA and market reports: lower global crude forecasts supported lower average gasoline-price forecasts in the U.S. (EIA commentary translating crude into pump‑price estimates such as mid‑$3/gal ranges for 2024–2026), but the EIA and IEA made clear pass‑through is incomplete and regionally variable because crack spreads, refining constraints, and policy/tariff events can offset or delay declines ^{[10] [2] [1] [5]}. Reuters coverage of EIA updates reinforced that higher U.S. output and global oversupply weighed on prices broadly ^[13].

8. Competing viewpoints and reporting gaps

Forecasters broadly agree on higher production and downward pressure on crude, but they differ on timing and depth—EIA scenarios range from Brent in the mid‑$60s to low‑$50s by 2026 in some updates, while the World Bank and McKinsey clustered forecasts in the mid‑$60s ^{[1] [8] [3] [4]}. Available sources do not provide granular, state‑by‑state pump‑price breakdowns, household impact studies, or political analyses of how local taxation or subsidies altered consumer prices; those topics are not covered in the supplied reporting.

Bottom line: Between 2021 and 2025, rising U.S. and non‑OPEC+ output and softer demand pushed crude-price forecasts down, easing pressure on U.S. pump prices on average—but refiners’ margins, seasonal maintenance, regional trade actions and policy risks frequently blunted or delayed that relief at the pump ^{[1] [2] [5]}.