Twenty percent of the world’s oil and gas production remains bottled up behind the Strait of Hormuz. In Asia, schools are closing. In Europe, flights are being canceled. In the United States, the pain is mainly felt at the gas pump.
As of Monday, the national average price hit $4.46, according to AAA, up from less than $3 before the war. The Federal Reserve Bank of Dallas projects that the cost of a barrel of crude oil could top $167, equivalent to at least $5 per gallon based on historical trends, if the Strait remains closed through September.
That might be conservative. Major banks, including Macquarie, warn that spot prices for crude may peak at $200 per barrel by early summer. Based on past energy shocks, that implies U.S. gas prices could crack $7 a gallon, potentially high enough to trigger a global recession.
“The market is saying that this will solve itself within a month,” said Lars Lysdahl, a partner at the Oslo-based consulting and research firm Rystad Energy, “which I don’t believe.” Even if the Strait reopens tomorrow, oil prices are likely to stay high until next year, perhaps longer. Damaged refineries and other infrastructure will take years to repair.
The middle of a global energy crisis is a good time to ask yourself: Should I break up with the gas pump for good? The surge in oil prices is shifting the math for EVs in ways that may change the next car you buy.
This wouldn’t be the first oil shock to transform personal energy decisions and reorder the global economy. The 1970s oil crisis created an enormous market for more-efficient cars that transformed the auto industry. Between 1975 and 1985, the average fuel economy of a new U.S. vehicle surged from roughly 13 to 21 miles per gallon, according to Environmental Protection Agency data, fueling the rise of Asian automakers that dominate global vehicle sales today.
Could rising gas prices spark a 1970s-era renaissance for ultraefficient vehicles like EVs? If you know where to look. The savings are real, just not evenly distributed.
Here’s how to never think about the Strait of Hormuz at the pump again.
Transition of power
Electric vehicles seem perfectly positioned to seize this moment. EVs have historically saved drivers around 60 percent per mile in fuel costs over gas-powered vehicles, based on U.S. government data from before the Iran war.
If prices reach $5.50 per gallon this summer, the premium is likely to jump to about 74 percent. That’s based on the calculation that every $10 increase in crude oil prices tends to be associated with a 25‑cent-per-gallon hike in U.S. gasoline prices, according to James Hamilton, a professor of economics at the University of California at San Diego. The current crisis could drive even higher increases, since disruptions can increase the premium for finished products such as gasoline.
For the average EV owner, that would be about $1,600 in annual fuel savings compared with a gasoline vehicle, up from about $550 at prices seen early this year, before the start of the war. Those figures are based on the average mileage of a U.S. driver from Kelley Blue Book, national average home electricity prices and fuel-efficiency estimates from the Department of Transportation.
Despite their higher sticker prices, EVs have generally been the smarter financial bet when you factor in fuel and maintenance savings. Federal incentives often closed the purchase price gap entirely. But Congress and the Trump administration eliminated those incentives in September – including the $7,500 new EV tax credit and $4,000 used EV credit – and rolled back the fuel-economy standards and California emissions rules that pushed automakers to expand their EV lineups.
After policy support collapsed, automakers pulled electric models from the market: At least 18 automakers in the U.S. canceled, delayed or scaled back EV plans over the past year. A 100 percent tariff on Chinese-made electric vehicles has kept cheaper options off American roads.
The upshot is that the sticker price of a new EV is now 13 percent more in the U.S. than for a comparable gasoline vehicle. (New owners may still save modestly over the life of a vehicle.) Unsurprisingly, Cox Automotive reported a 25 percent drop in sales of new EVs in March compared with the same month the year before.
Yet things look very different over on the used-car lot.
For buyers of used EVs, the electric future has arrived: Used EV prices now rival those of comparable used gasoline cars – and in recent months have fallen below the average used gas vehicle, according to data from Cox and iSeeCars. (In many other countries, new EVs have already crossed this threshold.)
Most used EVs are low-mileage vehicles, still under warranty and with minimal battery degradation. Recurrent Auto, a battery analytics firm, reports that EVs retain 95 percent of their original charging capacity after five years, on average. Prices should stay low: There are at least 600,000 more EVs coming off short-term leases over the next two years in the U.S.
Buyers are making the switch. In March, the first full month of the Iran war, used EV sales rose almost 28 percent year over year and by more than 50 percent over February, according to Cox. Interest in EVs and hybrids has ticked up on car-shopping platforms, reports Edmunds.
Gas prices alone, however, won’t be enough to persuade most buyers to go electric.
Sticker shock
Britta Gross, director of transportation at the Electric Power Research Institute, said volatility, not just high gas prices, is most effective at pushing drivers toward more fuel-efficient vehicles. Electricity has remained largely stable compared with the volatile oil market. “When the [gas price] line is going up and no one knows where it goes, there is a lot of interest in EVs,” said Gross, who spent nearly two decades as an executive at General Motors.
For most drivers, though, sticker price is still the biggest barrier to going electric. Forty percent of prospective buyers cite up-front cost as their primary obstacle to going electric, ahead of range anxiety and charging concerns, according to a 2024 YouGov survey. “People tend to severely discount the future savings,” said Robbie Orvis, who directs policy modeling for the energy and climate policy think tank Energy Innovation.
The Iran war price spike hasn’t changed this calculus. Deloitte’s recent survey of global auto markets suggests that EV market share plateaus at around 10 to 15 percent when EVs carry a price premium over comparable gas vehicles.
EV sales have historically surged under two conditions, says Lysdahl of Rystad: the arrival of low-cost Chinese EVs, or government incentives that offset the price premium for EVs.
Once EVs and hybrids reach price parity, new sales begin to overtake conventional vehicles within a matter of years, according to the International Energy Agency. PricewaterhouseCoopers, a consulting firm, predicts that vehicles with internal-combustion engines will fall to just one-third of new sales in the U.S. once EVs reach price parity. In Norway, where the government doubled down on incentives, 96 percent of new car sales are now electric.
The U.S. is choosing a different path, at least for now. While the price of electric passenger vehicles was expected to fall below that of comparable gasoline vehicles in the U.S. before the end of the decade, according to Bloomberg New Energy Finance, tariffs and political opposition have delayed that milestone. The destination, however, hasn’t changed.
“We are all going to EVs globally,” Ellen Hughes-Cromwick, a former chief global economist at Ford, told The Post last year. “It is just a question of when.”
(c) 2026, The Washington Post · Michael J. Coren