Key facts
- US gasoline demand may not recover post-Iran conflict.
- US and Israeli attacks on Iran contributed to higher gasoline prices.
- Gasoline consumption fell 6.1% year-over-year in May.
- Half of the consumption decrease is attributed to price sensitivity.
- The other half of the decrease is attributed to vehicle efficiency and telecommuting.
- Americans' driving habits may have permanently shifted.
US gasoline demand might not rebound to previous levels after the recent US and Israeli attacks on Iran, which have contributed to elevated fuel prices. Consumption of gasoline in the United States experienced a notable decrease of 6.1% in May compared to the same period last year. This reduction in demand is attributed to two primary factors, each accounting for approximately half of the observed decline. One significant driver is increased price sensitivity among American consumers, who are altering their driving habits in response to higher costs at the pump. The other half of the demand decrease is linked to more structural shifts, including improvements in vehicle fuel efficiency and a continued rise in telecommuting, which reduces the need for daily commutes. These combined influences suggest a potential permanent alteration in Americans' driving patterns, indicating that the pre-conflict levels of gasoline consumption may not be reattained.