The war in Iran has already transformed the world’s energy map. It might yet redraw America’s auto market.
Now in its third week, the U.S. and Israeli military campaign in Iran has escalated to involve targets across the Middle East, including the Strait of Hormuz — a narrow waterway at the mouth of the Persian Gulf that serves as the world’s most critical fossil fuel chokepoint. The war has effectively closed the oil tanker traffic that used to navigate the strait, which on a normal day carries up to 20% of the world’s traded petroleum.
But unlike during those crises, the world now possesses a massive, rapidly scaling, and for the most part readily available asset to soften the blow: the electric vehicle.
The global EV fleet has been growing for years, gradually chipping away at the world’s oil consumption as drivers turn to charging ports instead of gas stations. Last year, EVs worldwide avoided the consumption of 1.7 million barrels of oil per day, according to a report published Wednesday by Ember, an independent energy think tank based in the U.K. That’s roughly 70% of the 2.4 million barrels Iran exported daily through the Strait of Hormuz in 2025.
While the crisis has sent global oil prices soaring, the declining need for petroleum in transportation is providing a critical cushion in some countries. And the longer fuel prices remain elevated, the more attractive EVs become to buyers.
“Oil is a particularly tricky resource to replace,” Daan Walter, a researcher at Ember and the report’s lead author, told Fortune. “It has been for 125 years now, except for the past five or six years, when we’ve had this new competitive lever in electric vehicles.”
In the U.S., EV purchases hit a wall over the past few months as President Donald Trump rescinded many of the subsidies and incentives the Biden administration had installed to facilitate the transport sector’s electrification. Those measures mostly expired in September, and EV sales for the year ended up falling by 2%.
But that could change if prices stay high for much longer. “Gasoline prices are one of the biggest elements of people’s perception of inflation because you buy it so regularly,” Buckberg said. “It takes three to six months of persistently higher prices before people say, ‘Maybe I should go out and switch cars to one that’s more fuel efficient, including an EV.’”
“In some ways, no one is safe,” he said. “Even if you live between a gas well and a refinery, even then your prices are going up.”
“A shift towards EV basically would protect the economy from downside,” Buckberg said. “That link from oil geopolitics to oil prices to gasoline prices could be broken.”
“We’re no longer living in a world of risk-free fossil fuels. We’re living in a world where everything is risky and it now becomes a question of which risks do you want to take,” Walter said.
