Photo Credit: iStockAmericans are once again feeling the effects of a global oil crunch in a familiar place: the gas pump.With prices climbing and forecasts pointing even higher, the latest shock is also changing the equation for anyone deciding whether their next car should still run on gasoline.According to the Washington Post, roughly 20% of the world's oil and gas production moves through the Strait of Hormuz, and disruptions there due to the war in Iran are already pushing fuel costs higher. AAA said the U.S. national average for gasoline hit $4.46 in early May, up from under $3 before the conflict.AdvertisementAdvertisementThe Federal Reserve Bank of Dallas has projected that crude might move past $167 a barrel if the strait stays shut through September — historically enough to put gas at $5 a gallon or more.Major banks such as Macquarie have warned oil may briefly touch $200 a barrel, a scenario that could push U.S. gas prices close to $7, the Post noted.That possibility is making electric vehicles look far cheaper to operate. Based on government data, EVs were already costing drivers about 60% less per mile to fuel than gasoline-powered vehicles. If gas climbs to $5.50 this summer, that gap could widen to about 74%.For households already financially stressed by high costs, a spike at the pump can ripple through nearly every part of the budget.AdvertisementAdvertisementAt those higher gasoline prices, the typical EV owner would save roughly $1,600 a year on fuel versus a gasoline driver, compared with about $550 before the recent surge.The challenge is that many shoppers still focus first on the sticker price. After federal EV tax credits ended in September, the average new EV in the U.S. costs roughly 13% more than a similar gas vehicle.Cox Automotive reported that new EV sales fell 25% in March from a year earlier.That helps explain why gas prices alone may not trigger a massive shift to electric cars overnight. Experts cited by the Post said buyers tend to move fastest when EVs reach price parity with gas vehicles or when incentives help close the gap.AdvertisementAdvertisementIf you're looking to protect yourself from fuel price volatility, the used vehicle market may offer the clearest opportunity.Cox and iSeeCars data indicate that used EV prices have lately come down to the level of comparable used gas cars — and in some cases below them.That is significant because many used EVs have low mileage and warranties still in place.Recurrent, a battery analytics firm, says EVs keep about 95% of their original charging capacity after five years on average.More broadly, shoppers may benefit from comparing total ownership costs — including fuel and maintenance — rather than focusing only on the purchase price, especially while gas prices remain unstable.AdvertisementAdvertisementAs Britta Gross, director of transportation at the Electric Power Research Institute, told the Post, "When the [gas price] line is going up and no one knows where it goes, there is a lot of interest in EVs."Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.
