The world's most important price for real-world oil barrels surged above $140 on Thursday, the highest since 2008.
Dated Brent, the price of shipments bought and sold in the North Sea, reached $141.37 a barrel, the highest level since 2008, according to S&P Global, which publishes the data.
The Strait of Hormuz has now been closed for more than a month, creating what the International Energy Agency is calling the biggest supply disruption in the history of the oil market. The waterway accounts for about a fifth of the world's oil flows and refiners have spent the weeks since scrambling to get hold of whatever barrels they can.
Dated Brent surged from just over $128 a barrel a day earlier and is higher than the peak of the crisis in 2022, when Russia invaded Ukraine. Benchmark Brent futures are still lower than back then, but the value of Dated Brent represents the price of crude for a different, more immediate delivery period.
Western carmakers have been paring back their electric-vehicle ambitions in response to weaker regulation and demand, leaving buyers wondering whether their next vehicle would come with a plug after all. Now these assumptions have been jolted by another unexpected shift: the surge in gasoline prices triggered by war in the Middle East.
Previous energy shocks have left their mark on the car industry, affecting both the volume and type of vehicles sold, as well as how much consumers can pay.
The repercussions this time depend on how long the fighting lasts and when the Strait of Hormuz reopens. Automakers able to respond nimbly to shifts in demand while offering superior energy efficiency at an affordable price should cope best. In the US that means hybrid-vehicle champions such as Toyota Motor Corp. and Hyundai Motor Co., while in Europe I'd count on Chinese EV giant BYD Co. winning further market share. Anyone wanting a cheaper ride should also consider a used EV. Even second-hand electric Porsches offer value for money.
As if the auto industry didn't have enough problems already, the Iran war adds yet more uncertainty. If buyers feel less flush because of inflation or depressed stock portfolios, carmakers may sell fewer vehicles than they hoped.
Housing aside, people's purchases usually don't come bigger than a car. And they've already gotten pricier because of tariffs, higher raw-material costs, elevated interest rates and the trend of automakers abandoning less profitable sedans. US buyers are stumping up more than $49,000 on average for a new ride, while in Britain the average recommended retail price is an eyewatering £57,000 ($76,000). Consumers are doubtless looking for more affordable options, though in America they'll have to look hard.
US gasoline prices have risen by a third to roughly $4 a gallon since the Iran war started. President Donald Trump wants to wrap up hostilities fairly soon. But if Tehran doesn't reopen the Hormuz waterway and oil prices remain above $100, fuel efficiency will become an urgent priority for car buyers.
The 1970s oil crises helped less fuel-hungry Japanese models gain a foothold at the expense of US automakers' land yachts. When oil prices rose in 2008, buyers turned to smaller cars and Detroit's gas guzzlers sat unsold on forecourts.
So it's unhelpful, to put it mildly, that the US has scrapped EV-sales incentives, while gutting fuel-economy and greenhouse-gas standards. If Trump's aim was to help Detroit sell more planet-polluting SUVs and trucks, starting a war and triggering an oil-price shock seems counterproductive.
Europe's environmental rules remain far more stringent, and battery-powered models are far more popular there than in the US, yet governments on the continent have cut carmakers slack on their emissions.
The industry has responded by hitting the brakes on its EV plans. Ford Motor Co. halted production of its F150 Lightning electric pickup, while Stellantis NV scrapped a range of plug-in hybrids. Collectively, automakers have booked tens of billions of dollars of EV-related impairments.
Some are now prioritizing much thirstier vehicles. Stellantis is once again offering Hemi eight-cylinder engines for its Ram 1500 pickups, having abandoned the technology under its previous boss Carlos Tavares. With fuel prices rising "there may be some potential Ram customers who are questioning whether the V8 option still makes sense," Bernstein analysts have told clients.
Compared with the first Gulf War in 1990, when European and US car sales fell as much as 8% and 15% on an annualized basis, fuel now accounts for a much lower share of people's disposable incomes, notes Stuart Pearson at Oxcap Analytics. And gasoline prices aren't the only financial consideration when choosing whether to go electric. The upfront cost of buying an EV tends to be higher; depreciation can be brutal; insurance isn't cheap.
Nevertheless, automakers selling more efficient vehicles should have an advantage. With the $7,500 federal EV tax credit no longer available in the US, consumers there may keep favoring fuel-sipping hybrids, which combine a gas engine and electric motor but don't require owners to plug them in. These accounted for almost one in five US vehicle sales in the last three months of 2025 -- three times the share of models powered by battery only.
While Ford offers several hybrids, Asian brands dominate this fast-growing corner of the market. It's fortunate for Detroit that Chinese automakers are effectively barred from selling vehicles in US by a combination of tariffs and software rules denying consumers more choice.
In Europe, barriers to such imports are lower and it may see an even greater influx of Chinese cars. BYD is already running adverts that highlight how buying a hybrid or EV can save you money when fuel prices rise. Fortunately, continent’s automakers are more resilient having developed their own competitively priced EVs. Renault SA’s Twingo electric mini costs less than €20,000 ($23,000).