US Crude Slides Toward Worst Year Since 2018

Billy Bob “Landman” Thornton is back on Paramount+ as a Permian Basin fixer, and real-life Texas oil firms could use some of his swagger.

US oil prices sank 3% on Tuesday, continuing a nearly two-year trend that has now left them near their lowest point since early 2021 — a.k.a., the tail end of worldwide Covid shutdown mandates. We’ll take anything cheap at this point, so cool. But it could be another sign of a broader economic slowdown. Meanwhile, geopolitical maneuvers in both the Eastern and Western hemispheres may rattle the market.

Hit The Gas

So how low have prices fallen? US crude is down 23% year-to-date, its worst performance since 2018; the global Brent benchmark, by comparison, is down 21%, its worst performance since 2020. Correspondingly, Americans are enjoying the lowest prices at the pump in about 4 years, according to drivers’ organization AAA, with the average price for a gallon of gas at long last falling below $3. 

The dollars saved are sure to be welcomed by Americans facing otherwise persistent inflation and an economic slowdown that may well be spurring oil’s slump; in a shutdown-delayed October/November double-jobs report published Tuesday, the US Bureau of Labor Statistics reported the US unemployment rate has hit a four-year high of 4.6%. (Maybe Thornton’s next streaming series role could be a monologuing central banker caught between rising prices and slowing economic activity? We’d give it a watch!)

For the foreseeable future, at least, consumers can pencil in more price declines:

• According to a recent JPMorgan Commodities Research note seen by Reuters on Tuesday, 2025’s oil surpluses are expected only to widen through 2026 and 2027, with global supply expected to expand at three times the rate of demand growth next year.
• Behind the global surplus lies a trifecta of forces: a rapid uptick in production from OPEC+ member nations, slowing manufacturing activity in China (down to a 15-month-low in November), and growing US pressure on Ukrainian officials to accept peace agreements with Russia, which would free Ukraine’s oil infrastructure from Russian attacks while likely leading to loosened or lifted sanctions on Russian oil from western nations.

East to West: At the same time, mounting tensions around Venezuela have the market’s attention.  The country’s oil exports have plummeted since US forces seized one of the country’s oil tankers last week. “The grind lower in oil prices and the achieving of month-to-date lows across the major futures complex last week might have seen more negative pricing if it were not for the upping of the ante by the United States with regard to Venezuela,” PVM analyst John Evans told Reuters.