In six past oil supply shock episodes, auto sales dropped by more than 10% of average sales. Three times, they dropped by 40% or more.
East Lansing, Mich.—The disruption in the supply of oil from the Middle East caused by the war that began on February 28 could have significant effects on auto sales. It is impossible to predict the course of events at this point, states Anderson Economic Group (AEG) in a news release. However, past episodes that involved wars and embargoes had significant, and sometimes dramatic, effects on U.S. auto sales.
“History shows that Americans cut back sharply on buying cars when wars, invasions, and oil embargoes occur,” said Patrick L. Anderson, Principal and CEO of AEG “While we don’t know how long this war will last or what the effects will be,” he added, “at least six times since the 1970s, an event such as this has caused a sharp drop in auto sales. Three times since 2008, we’ve seen a drop of 12% or more, and the 2008 oil spike and great recession episode saw a drop of over 40%.”
Anderson noted differences in 2026 from the crises of the 1970s and 1990s: “First, cars are a lot more reliable and fuel efficient than they were 20 years ago. Second, a lot of people work from home at least part of the work week. Third, the U.S. is now energy sufficient overall. All these factors reduce, but do not eliminate, the United States’ vulnerability to oil supply shocks.”
One new wrinkle: About 1% of the active fleet today are electric vehicles. Consumers now have the option of switching to a BEV or to simply forego buying a new vehicle.
Summary table: Six oil shock episodes and their impact on auto sales
| Episode | Sales Drop |
| 1973-74 Arab Oil Embargo | 44.7% |
| 1979-80 Iranian Revolution and Second Oil Shock | 40.9% |
| 1990-91 Gulf Crisis (Iraq invades Kuwait) | 18.6% |
| 2008 Oil Spike and global financial crisis | 45.5% |
| 2011 Arab Spring and Libya supply shock | 19.0% |
| 2022 Russia and Ukraine oil price spike | 12.7% |
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