Developments around the world in 2015 have caused gas prices to drop nearly 50% over the last six to nine months, from a peak of close to $4.00 per gallon in 2014 to under $2.00 on average as winter draws to a close and spring begins. Oil has dropped from close to $100 per barrel in 2014 to between $25 and $35 a barrel, on average, due to an increase in U.S. oil production and a number of political and economic factors in other parts of the world.
In addition to the U.S. nearly doubling its oil production in recent years, countries like Russia and Saudi Arabia have continued to produce at the same levels, while Iran, whose production had been stifled by sanctions, is expected to add even more oil to an already flooded market as sanctions are lifted.
The oil industry is in a period of deep downturn, with about two-thirds of existing oil rigs being decommissioned and new exploration grinding to a halt. Larger oil companies are losing money and many smaller ones have gone bankrupt, with an estimated 250,000 oil workers losing their jobs in 2015 and 2016 so far. The stock market in the U.S. and other countries has also declined at least partly due to the impact of dropping oil prices.
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