As the US-Iran conflict disrupts global oil via the Strait of Hormuz closure—driving prices above $100 per barrel—Trump administration rollbacks on vehicle fuel efficiency standards are amplifying domestic gasoline price surges, undoing decades of efficiency gains that previously blunted such shocks.
Oil prices have climbed above $100 per barrel since the US-Israeli strikes on Iran late last month closed the Strait of Hormuz, through which 20% of world petroleum passes (see prior coverage on market surges and producer cuts). US gasoline prices are rising, but less severely than the 1973 oil embargo's 50% jump, which caused rationing and lines at pumps. Nixon-era responses included energy-saving pleas like skipping Christmas lights.
Today's milder impacts stem from the fracking boom—making the US top global producer—and federal fuel economy rules. Since 1973, gasoline use per economic output has fallen over 70%, with vehicles traveling nearly twice as far per gallon. The 1975 CAFE standards doubled fleet efficiency from 10 mpg in 1970 to 20 by 1990; Obama-era rules pushed toward 30 mpg by 2020, stabilizing oil demand despite more driving.
Trump has reversed this. Last summer's 'One Big Beautiful Bill Act' zeroed CAFE penalties; February's EPA actions repealed Biden tailpipe standards and the greenhouse gas 'endangerment finding.' Official projections claimed $1.3 trillion in vehicle savings but $1.5 trillion in extra fuel/repair costs by 2055—at $3/gallon gas and $80/barrel oil, now invalidated by the crisis.
"Oil prices higher than assumed make the repeal less justifiable," said Richard Revesz, ex-EPA vehicle overseer. Joshua Linn of Resources for the Future noted: "If oil stays high and volatile from instability, that's different." Energy economist Christof Rühl added: "Policies slow efficiency gains." Environmental groups are suing the repeals.
