The holiday season is delivering a gift for drivers as gas prices in Oregon and across the country continue to fall. The national average is down to its lowest price since May 2021 while the Oregon average is at its cheapest price since February of this year. The cheaper pump prices come as a record number of Americans get ready to travel for the holidays. For the week, the national average for regular declines four cents to $2.91 a gallon. The Oregon average tumbles nine cents to $3.61 a gallon. This is the second week in a row that the Oregon average has decreased by nine cents.
“The falling pump prices are driven by crude oil prices below $60 per barrel and refineries cranking out plentiful supplies of gasoline. Lower gas prices should stick around as we close out 2025, if there are no geo-political events that impact crude oil prices and/or disruptions to production or distribution of fuel,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
AAA projects record travel for the holidays with 122.4 million Americans including 1.7 million Oregonians traveling 50 miles or more for the Christmas, Hanukkah, and New Year holidays. This year’s travel volume is up 2.2% over 2024. About 89% of travelers will drive, 6.6% will fly, and 4% will go by cruise, train or bus.
The Oregon average for regular gas began 2025 at $3.45 a gallon and is currently at $3.61. The highest price of the year so far is $4.297 on September 13 and 14. The lowest price of the year so far is just under $3.45 a gallon on January 2.
The national average began 2025 at $3.06 a gallon and is currently at $2.91. The highest price of the year so far is $3.268 on April 4. The lowest price of the year so far is today’s average of $2.91.
This week no Oregon county has an average at or above $4, down from one a week ago. Wallowa was the last Oregon county to drop below that threshold.
Demand for gasoline in the U.S. gasoline increased from 8.33 million b/d last week to 8.46 million for the week ending December 5. This compares to 8.81 million b/d a year ago. Total domestic supply of gasoline increased from 214.4 million barrels to 220.8 million. Gasoline production decreased last week, averaging 9.6 million barrels per day compared to 9.8 million barrels the previous week.
Gas prices usually drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31. Prices usually decline to their lowest levels of the year in late fall and early winter before increasing again in the late winter and early spring.
Gas prices typically rise starting in mid-to-late winter and early spring as refineries undergo maintenance ahead of the switch to summer-blend fuel, which is more expensive to produce and less likely to evaporate in warmer temperatures. The switch occurs first in California, which is why pump prices on the West Coast often rise before other parts of the country. The East Coast is the last major market to switch to summer-blend fuel. Most areas have a May 1 compliance date for refiners and terminals, while most gas stations have a June 1 deadline to switch to selling summer-blend. Switch-over dates are earlier in California with some areas in the state requiring summer-blend fuel by April 1. Some refineries will begin maintenance and the switchover in February.
The U.S. price of crude oil (West Texas Intermediate) has mostly been in the upper $50s to mid-$70s since September 2024. Crude prices spiked to the mid-$70s in mid-June in response to the strikes between Israel and Iran, and then the U.S. strike on Iran’s nuclear facilities, but then prices fell back into the $60s on the belief that the conflict would not have a major impact on global oil supplies. Crude prices fell in early April as markets reacted to President Trumps tariffs and the impact on U.S. and global markets. Additional downward pressure on crude prices came after the decision by OPEC+ to increase production. The recent high price for crude was $80.04 per barrel on January 15, 2025.
WTI crude oil fell below $55 in trading today, the lowest price since early 2021, compared to $58 a week ago and $71 a year ago. In 2024, West Texas Intermediate ranged between $66 and $87 per barrel. In 2023, WTI ranged between $63 and $95 per barrel. WTI reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.
Crude prices have moved lower this month as investors weigh a global surplus as well as the possibility of a peace agreement between Russia and Ukraine.
Crude prices are impacted by economic news as well as geopolitical events around the world including the current economic uncertainty, unrest in the Middle East, the conflict between Israel and Hamas, and the war between Russia and Ukraine. Russia is a top global oil producer, behind the U.S. and Saudi Arabia. Crude prices were volatile after the attack on Israel by Hamas in October 2023. While Israel and the Palestinian territory are not oil producers, there were concerns that the conflict could spread in the Middle East, which could potentially impact crude production in other oil-producing nations in the region. Crude oil prices declined after October’s fragile peace agreement between Israel and Hamas. In addition, production cuts by OPEC+ in previous years tightened global crude oil supplies, which continued to impact prices. But this year, the cartel has boosted production starting by 411,000 barrels per day in May, June, and July, 548,000 barrels per day in August, 547,000 barrels per day in September, and 137,000 barrels per day in October, November and December.
Crude oil is the main ingredient in gasoline and diesel, so pump prices are impacted by crude prices on the global markets. On average, about 49% of what we pay for in a gallon of gasoline is for the price of crude oil, 14% is refining, 21% distribution and marketing, and 17% are taxes, according to the U.S. Energy Information Administration.
Meanwhile, crude oil production in the U.S. remains at or near record highs. The U.S. Energy Information Administration (EIA) reports that crude production in his country rose from to 13.82 to 13.85 million barrels per day for the week ending December 5. Production has been at 13.5 million barrels per day many times since October 2024. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.
Quick stats
Oregon is one of 45 states and the District of Columbia with lower prices now than a week ago. Idaho (-12 cents) has the largest week-over-week decline in the nation. Ohio (+9 cents) has the biggest week-over-week increase in the nation.
After 12 weeks, Hawaii ($4.44) bumps California ($4.36) as the state with the most expensive gas in the nation. Washington took over the top spot for a week in September when the Olympic Pipeline was out of operation. This week, Washington ($4.00) is third. These are the only states with averages at or above $4 a gallon. This week nine states and the District of Columbia have averages in the $3-range. There are 38 states with an average in the $2 range this week.
The cheapest gas in the nation is in Oklahoma ($2.31) and Iowa ($2.46) and. No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.
The difference between the most expensive and least expensive states is $2.14 this week, compared to $2.08 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 17 cents less and the Oregon average is also 17 cents less than a month ago. Nevada (-40 cents) has the biggest month-over-month drop in the nation.
Oregon is one of six states with higher prices now than a year ago. The national average is 12 cents less, while the Oregon average is 14 cents more. Alaska (+25 cents) has the largest year-over-year increase in the country. Oregon has the second-largest year-over-year increase. Colorado (-38 cents) has the largest yearly drop.
West Coast
The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. It’s typical for the West Coast to have six or seven states in the top 10 as this region tends to consistently have fairly tight supplies, consuming about as much gasoline as is produced. In addition, this region is located relatively far from parts of the country where oil drilling, production and refining occurs, so transportation costs are higher. And environmental programs in this region add to the cost of production, storage and distribution.
Diesel
For the week, the national average falls five cents to $3.64 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses seven cents to $4.21. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $3.50 and the Oregon average was $3.77.
Source: AAA