As we step into 2026, the energy landscape is poised for significant shifts driven by geopolitical tensions, technological advancements, and policy changes. For consumers, rising costs in electricity, gasoline, and diesel remain a pressing concern, often varying starkly along political lines in the U.S. Investors, meanwhile, can find opportunities in resilient sectors like shale oil, renewables, and emerging technologies amid predictions of market volatility. Drawing from recent data and expert forecasts, this article explores key trends to watch, including price disparities between Democrat- and Republican-run states, insights from Rystad Energy’s 2026 predictions, and promising companies for strong returns.
Electricity Price Trends: A Partisan Divide
Electricity prices have been climbing nationwide, with a 27% increase during the Biden administration and an additional 11% from January to September 2025.
However, the burden isn’t evenly distributed. States controlled by Democrats—often referred to as “blue states”—consistently face higher rates compared to Republican-led “red states.” According to analysis, 86% of continental U.S. states with electricity prices above the national average are reliably blue, based on voting patterns and governance.
On average, blue states pay 37% more for electricity than red states.
This disparity stems from differing policy approaches. Blue states have pursued aggressive renewable energy mandates and restrictions on fossil fuels, which critics argue drive up costs through subsidies, grid upgrades, and reduced reliance on cheaper coal and natural gas.
For instance, states like California and New York have seen rates soar due to these transitions, compounded by surging demand from AI data centers.
In contrast, red states like Texas and Florida benefit from deregulation, abundant natural gas, and fewer mandates, keeping prices lower.
Consumers in blue states should brace for continued upward pressure, with average monthly bills rising from $121 in 2021 to $156 by 2025To mitigate this, look into energy-efficient appliances, solar incentives (where available), or even relocating to lower-cost areas. In red states, stability is more likely, but watch for any federal policy shifts under new administrations that could harmonize regulations.
A shout-out to the Energy Bad Boys, Isaac Orr and Mitch Rolling, on their reporting.
At Energy News Beat, we would like to thank the Democratic Governors for increasing our readership on the Energy News Beat Substack, Website, and YouTube, as people are looking for answers.
Just so you can start 2026 with the right frame of mind. Here is the US electricity prices by State, Political Leadership, and by Year. We are heading into the midterms, and “Affordability” is an issue. – Hat tip to the Energy Bad Boys. @EnergyAbsurdity, your political views and… pic.twitter.com/0DAofc5C2t
— STUART TURLEY – Energy Podcast Host (@STUARTTURLEY16) December 27, 2025
Gasoline and Diesel Prices: Red States Lead in Affordability
Similar patterns emerge in transportation fuels. As of late 2025, the national average gasoline price hovers around $2.83 per gallon, but state-level variations highlight a clear divide.
Red states generally boast lower gasoline prices, often due to proximity to oil production hubs, lower state taxes, and fewer environmental regulations.
For example, states like Texas and Oklahoma see averages below $2.50, while blue strongholds like California top $4.59 per gallon—driven by high taxes, cap-and-trade programs, and refining constraints.
Diesel follows suit, with the lowest prices in red states such as Texas ($4.69), Louisiana ($4.84), and Oklahoma ($4.85).
Blue states, including those on the West Coast, face higher costs due to stringent emissions standards and supply chain issues. Overall, blue states average 13% higher energy costs than red ones, encompassing fuels.
For consumers, this means budgeting more in blue states, where prices could rise further with potential tariffs or global supply disruptions.
Strategies include hybrid or electric vehicles (if infrastructure supports it), carpooling, or advocating for tax relief. In red states, enjoy the relative stability, but monitor oil market volatility.
Rystad Energy’s 12 Predictions: A Roadmap for 2026
Looking globally, Rystad Energy outlines 12 key predictions that could shape energy dynamics in 2026.
These provide a forward-looking lens for both consumers and investors:
Refinery Utilization Boost: Global utilization surges, supporting strong margins despite weak demand growth, with risks in Europe (diesel) and U.S. East Coast (gasoline).
Resilient U.S. Shale: Output holds steady even at low prices through efficiency and M&A.
Supply Chain Pivots: Early softness in oilfield services improves later, with tightness in deepwater and subsea.
LNG Market Transition: 30 million tonnes of new supply, mainly from North America, heads to Asia amid volatility.
China’s Crude Stockpiling: Increased strategic reserves prioritize security, setting a price floor.
Economic and Geopolitical Mix: Stronger economy but softer energy prices; uncertainties from Ukraine, Middle East.
Upstream Uncertainty: Oversupply caps oil below $70; focus on exploration in key regions.
Data Center Boom: Rapid growth in Americas strains grids, spurring on-site generation.
Asian Supply Gaps: Delayed projects signal shortages; gas and CCS gain traction.
Frontier Exploration: Steady spending on high-quality blocks in Asia, Africa, and beyond.
M&A Opportunities: $150 billion in upstream deals, led by U.S. shale consolidations.
Renewables Slowdown: Capacity growth dips to 650 GW, down 7%, due to policy shifts in China and U.S.
These forecasts suggest a year of adaptation, with lower oil prices benefiting consumers but challenging producers. Watch for AI-driven demand spikes and geopolitical risks that could spike costs unexpectedly.
Investment Opportunities: Companies Poised for Strong Returns
Investors eyeing energy in 2026 should focus on diversified plays in oil, gas, renewables, and emerging tech, capitalizing on Rystad’s themes like shale resilience, LNG growth, and data center demands. Here are top picks based on analyst recommendations for potential high returns:
ExxonMobil (XOM): A blue-chip giant investing in low-carbon solutions while maintaining core oil operations. Its focus on thriving through energy transitions makes it a buy-and-hold for stability and dividends.
Chevron (CVX): Strong in upstream and downstream, with exposure to the Permian Basin shale. Analysts highlight its growth potential amid M&A and resilient production.
Diamondback Energy (FANG): A Permian leader, favored for shale efficiency and consolidation plays. Piper Sandler calls it a top pick for 2026 upside.
NextEra Energy (NEE): Leading in renewables, with better earnings momentum and valuation than peers like Constellation Energy (CEG). Ideal for transition-focused portfolios.
New Fortress Energy (NFE): Under-the-radar in LNG and power for data centers; positioned for AI demand growth.
GE Vernova (GEV): Focuses on power generation and renewables; William Blair sees strong prospects in gas turbines and grid tech amid data center booms.
Other notables include Cenovus Energy (CVE) for growth, Occidental Petroleum (OXY) for carbon capture, and Nano Nuclear Energy (NNE) for innovative small reactors.
Diversify across traditional and green energy suppliers until the subsidies run out to hedge against volatility, and consult financial advisors for personalized strategies. If you live in a heavily taxed state or have a high tax burden, look for oil and gas private deals with strong returns and a proven track record of delivering returns to investors. We do not give investment advice, but do understand oil and gas deals and drilling economics.
2026 Predictions and Outlook
In summary, 2026 promises affordability challenges for consumers in blue states but opportunities for savvy investors in adaptive companies. Stay informed on policy changes and global events to navigate this evolving sector effectively. Watch out for the 2026 midterms, and if the Republicans don’t get voter fraud legislation fixed, it will accelerate the migration away from Blue States.
In global markets, we will see new trading blocs form, based on energy policies. Countries aligning with Net Zero will fall into fiscal decline and despair, and the others will push forward to prosperity. Those countries in the new trading bloc look to be India, Russia, Japan, Saudi Arabia, and the United States.
For Oil prices, we will see the Glut narrative end in the first or second quarter, and we should head to the $65 to $70 range in the first half of the year, with prices trending up as the world heals and demand grows.
For natural gas prices, we will lose the cyclical nature of the pricing and edge more towards a solid range around $4.50 to $7 spikes. People are saying there will be a glut of LNG, and I am looking at the sheer number of natural gas plants being built as an offset to that narrative.
We need same-day paper ballots for United States Citizens only, and if we don’t get that in place, watch more graft, waste, and abuse from leaders like Tim Waltz and Gavin Newsom run rampant in their states. Without accountability, we have no government or country.
If the Republicans cannot win the war of articulation, we will lose the midterms. They can not let the Democrats win the “affordability” on energy, as they have caused this issue, and this and ballot harvesting are the only two things they have to stand on.
Buckle up, and the world is healing, waking up, and we will be more prosperous on the other side. 2026 looks to be a bumpy, but significant step to healing.
Sources: rystadenergy.com, fool.com, money.usnews.com, automotive-fleet.com, visualcapitalist.com, gasprices.aaa.com, energybadboys.substack.com, realclearenergy.org
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