How the Global Energy Crisis Is Affecting Americans

Escalating Middle East tensions are rattling global oil markets, and the effects are already showing up in American wallets, affecting everything from travel to food prices. Georgia Tech economists and public policy experts break down what Americans need to know right now.

1. You’re paying more at the pump, and it’s not going away anytime soon.

Gas prices are the most visible sign of the crisis, and the increases are already significant. National average retail gasoline prices are more than $1.20 higher than they were in February, before the conflict escalated.

“Even though U.S. petroleum production often exceeds our consumption, we are not insulated from disruptions in global oil supply because oil is a globally traded commodity,” says director of the Energy Policy and Innovation Center, Laura Taylor. “If supply is restricted anywhere in the world, prices will rise everywhere, including in the U.S.”

Markets expect some relief by fall, with future prices pointing lower than today’s levels. But Tony Harding, assistant professor in the Jimmy and Rosalynn Carter School of Public Policy, cautions, “Prices are likely to remain above pre-conflict levels for the foreseeable future, and temporary relief measures, such as Georgia’s motor fuel tax suspension, will not last forever.”

Taylor puts it plainly: “Wages are not rising faster than prices, so people are feeling the pinch and will continue to do so.”

2. Your summer plans just got more expensive.

The impact does not stop at the gas station. For Americans planning summer travel, the timing of this conflict could not be worse. Matthew Oliver, associate professor in the School of Economics, points to commercial air travel as one of the most exposed sectors.

“Jet fuel prices have roughly doubled in the wake of the current oil price spike, putting immediate upward pressure on airfares,” says Oliver.

The ripple effects extend far beyond travel. 

“Oil is an input into the supply chain of nearly every good at some point,” says Bobby Harris, assistant professor in the School of Economics. “When input costs go up, prices go up.”

3. Expect to pay more at the grocery store.

The connection between Middle East tensions and the American dinner table is more direct than many realize, because petrochemicals are a key feedstock for fertilizer production.

“Higher oil prices lead to higher fertilizer prices, which lead to higher food prices,” says Oliver. 

Combined with existing tariff pressures and tight supply chains, the strain on household budgets is coming from multiple directions at once.

“If the crisis persists, there will be upward pressure on the prices of nearly every physical good,” Oliver adds.

4. The government’s options are limited, and the clock is ticking.

Washington has tools to respond, but none are silver bullets. The Strategic Petroleum Reserve currently holds around 400 million barrels and can release about 4 million barrels per day, roughly 20% of U.S. daily demand.

“I see the Strategic Petroleum Reserve as a tool to buy time during a crisis,” says public policy professor Dan Matisoff. “But if the conflict drags on, we will ultimately be in a more vulnerable position.”

Quick fixes like price caps or demand subsidies carry trade-offs. 

“Subsidies can mitigate the impact of price shocks, but they can also mask important market signals that help balance supply and demand,” says Harding, using Europe’s 2022 energy crisis as a cautionary example.

5. The smartest thing Americans can do right now is think about efficiency.

“People in general tend to undervalue energy efficiency,” says Matisoff. “Think of energy efficiency investments as a sort of hedge or insurance against volatile energy prices.”

That means considering fuel efficiency when buying a car, and looking at heat pumps, electric vehicles, and home energy upgrades when the time is right.

“Higher energy prices increase the value of investing in energy efficiency upgrades to your home and adopting technologies that are less dependent on fossil fuels,” says Harding.

For families navigating uncertainty, both economists and policy experts point to the same practical advice: Reduce your exposure to fossil fuel price swings before the next crisis hits.