Judy Vassallo, an 89-year-old retired art teacher who lives alone in a leafy neighborhood just north of Center City in Philadelphia, used to take her 2002 Honda CRV to the suburbs to visit friends, or downtown for doctor appointments and Pilates classes.
But as gas prices skyrocketed after the United States and Israel attacked Iran in late February, he couldn't bear to pay nearly double to fill his tank. Instead, Vassallo started taking the city bus, which is free for seniors. He discovered what he liked: saving on gas and parking tickets.
“Once it becomes a habit, it's not something burdensome, it's built into the pattern of my behavior,” Vassallo said. “You go to the city, you go take the bus. And I'm finding it's a lot easier.”
Americans are very attached to their cars and their spending at gas stations increased 21 percent from February to May. But that ability to spend has limits. According to Dow Jones Energy, consumption in May was 6.1 percent lower than a year earlier. Some of this is a long-standing trend due to the increasing efficiency of passenger vehicles, said Denton Cinquegrana, the company's chief oil analyst, and about half is probably a consumer response to higher prices.
Much of that response comes from people giving up discretionary driving, like road trips and their grandchildren's traveling sports games, especially those with lower incomes. But in recent years, Americans have also become more adaptable, as more employers have allowed teleworking and more electric vehicles have come to market.
“There is more flexibility in work situations,” Cinquegrana said.
Despite the car-dependent nature of most American cities, sticker shock does make a difference: After the oil embargo of the 1970s, per-person oil consumption in the United States fell and did not return to the same level for another 20 years.
Some of those changes may last. The energy crisis led to federal fuel economy standards that spurred gas-saving innovations in vehicle design, keeping fuel consumption lower than it otherwise might have been even as driving recovered.
Over the past decade, studies have shown that gasoline prices affect consumption both when they rise and when they fall. According to a 2021 article, drivers have become more receptive to high prices over time, possibly due to energy price shocks that have prompted them to try different forms of transportation.
One option that has become more available lately is battery power. Some popular models, such as the RAV4 and Toyota Camry, are now available only with hybrid engines.
According to Cox Automotive, hybrids have been flying out of dealerships since the war began. And although Congress truncated Biden-era incentives for all-electric vehicles, many of them come from subsidized leases to supply a healthy used vehicle market.
“We've seen a shift in consideration,” said Stephanie Valdez Streaty, director of industry insights at Cox. “People who need to buy a car are looking online for these more fuel-efficient options.”
One of those motivated buyers was Karin Ranta-Curran, a university administrator in Denver, who had decided to buy a third car because her youngest son started needing to drive more. The family had considered purchasing an electric vehicle, but gave up due to the expense of installing a home charger.
The war in the Middle East changed that.
“We woke up that morning and Israel started bombing Iran, and we thought, 'Okay, this could be the time,'” said Ranta Curran, who found a good deal on a used electric Lexus and now drives it to work.
She is happy with the car and with not having to pay for gasoline, even if geopolitical circumstances made it necessary. “We're certainly not the first to adopt it, so in some ways it was a bit of a forced decision.”
That's not an option for most people. Vehicle prices have risen sharply since the pandemic, interest rates remain high and low-income workers are under pressure as wage growth slows. This is leading consumers to put off expensive purchases, counteracting what could otherwise be a faster replacement cycle toward cleaner cars.
Even bicycle sales are down substantially from last year, according to the National Bicycle Dealers Association. He attributes the slowdown to an unstable economy and tariffs that drove up prices, although sales of electric bikes continue to grow.
Baylii Adams-Yates is among those who feel stuck. She attends college in Morgantown, W.Va., and works as a dental assistant. He has a 2016 Jeep that gets about 13 miles per gallon, and he doesn't think he can sell it for enough to buy a more efficient car. But having a car that's so expensive to run also means you can't take jobs a little further out of town or earn extra income doing deliveries.
“I tried using DoorDash for a week and emptied my gas tank in one day, every day,” said Ms. Adams-Yates, 25. “I would love to be able to do that, but it's not realistic.”
Other countries, particularly in Europe and Asia, are more affected by oil shortages than the United States. They also have access to affordable electric vehicles imported from China and have taken more policy measures to reduce energy demand. The U.S. Energy Information Administration forecast last week that global oil consumption would decline this year, rather than increase, as originally expected.
For many American consumers, there is no way to cut back on gasoline consumption and they simply have to reduce spending in other ways.
Take Kjersten Oudman, who runs a farm with her husband outside of Sioux Falls, SD. They have no choice but to fill their tractors with diesel to plant in the spring, and they have no choice but to deliver boxes of vegetables to 130 members of the shared farm once they have started harvesting, filling the van with gasoline about three times a week. Unlike large logistics companies, they cannot add a fuel surcharge; Subscriptions are paid at a fixed price.
“We'll have to eat it for the foreseeable future,” Oudman said. Shelling out a few hundred extra dollars a month means budgeting tight for food, which she tries to keep at $80 a week for her family of five, and putting off investing in the business. They hoped to insulate their washing and packaging building to store vegetables for longer, but additional fuel costs delayed the project.
“We got halfway there and said, 'Well, I guess we'll have to wait now,'” Ms. Oudman said.
It's not just gasoline. Oil heating is still common in some parts of the United States and its cost has risen much more than that of natural gas or electricity since the war began.
Jennifer Kewley moved into the house her great-grandfather built in Milwaukee in 2020 and replaced the roof and siding. But it still has an oil heater, and filling it costs about twice as much as it did before the war.
In March and April, she turned the heat to 55 degrees and bundled up while working from home doing medical billing for a hospital system. He filled the tank only half way, for $600, and expects the price to drop when he needs heat again in October. In the long term, you are thinking about how you could raise the money to replace the old boiler.
“I think this is a situation that could happen again,” Kewley said. “I don't think this is a one-off thing, where it could go another 20 years like this.”
Whether oil and gas demand recovers also depends on the price of everything else, as consumers have to balance the rising costs of food, utilities, insurance and other necessities.
Judith Awkerman already made a compromise: She gave up her dream of moving to a nicer house once her children finished college because housing prices have skyrocketed where she lives near Newport, Rhode Island. He has also given up frequently visiting his two sisters, who live in other parts of the state. She's not sure she'll take those longer trips again, even if gas prices go down.
“I don't think it's like, 'Yeah, we can do whatever we want,' because it's cumulative with everything,” he said. “Car repairs, medical expenses, medications… it would take a complete downgrade of the system, where inflation is very low, something that of course we won't have for a while, I don't think so.”
