American drivers are guzzling less gas as they work from home, in a potential shift for global oil: 'The heyday of gasoline is over'
American drivers are burning less gas than before the pandemic, signaling a potential shift for the oil market.
The EIA said Tuesday it expects US gas consumption to continue to drop this year and next.
More efficient cars, sales of electric vehicles, and work-from-home are the key factors.
American drivers are burning less gas compared with before the pandemic, a drop in demand that's set to continue and could change the character of the global oil market.
The Energy Information Administration said Tuesday that the US used 8.78 barrels a day of gas last year — a 6% drop over record pre-pandemic levels, per the FT. The EIA expects consumption to continue to fall this year and the next.
The downshift comes as Americans drive about 10% less, by miles covered, than before COVID-19 restrictions kept people at home. Remote and hybrid working is having an impact on travel patterns, especially in big cities, according to analysts.
Meanwhile, cars have become more fuel-efficient, and over the past 17 years they've squeezed another 6 miles or so out of a gallon of gas, according to the EPA. Plus, electric vehicle sales are rising as they become more mainstream, which also has an impact on how much gas is used.
"The consensus is we are not going to get back to pre-COVID levels of consumption," Energy Aspects research head Robert Campbell told the FT.
That matters because the US is the world's biggest single market for an oil product, far outstripping any other country, Campbell said.
Any drop in demand could have a knock-on effect on global oil markets. The US is the world's top consumer of oil, with a 20% share of the total, according to the EIA, and over 40% of those barrels are used for gas to power motor vehicles. In all, US gas represents about 9% of global oil use.
"The heyday of gasoline is over," S&P Global Platts analyst Alan Struth told the FT.
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