American households are paying more for energy, with higher gasoline and heating costs now colliding with rising pressure on electricity prices as oil markets reel from the Iran War disruption and utilities brace for heavier power demand. Brent and U.S. crude climbed back toward $100 a barrel after the collapse of U.S.-Iran peace talks and continued disruption around the Strait of Hormuz, a route tied to roughly a fifth of global oil flows.
“Because of the rising oil prices, those higher costs have really trickled down into lots of different consumer products,” said Robert Thummel, Senior Portfolio Manager at Tortoise Capital Advisors, in an interview with AInvest’s Capital & Power.
Thummel said U.S. production has helped soften the blow, but is unable to shield consumers from it, because crude is priced in a global market. “Oil is a global commodity,” he said. “The global oil market basically is pretty tight,” with limited inventories when supply is disrupted.
The squeeze begins at the gas pump. The Labor Department said in its April 10 Consumer Price Index report that gasoline prices surged 21.2% in March from a month earlier, the biggest monthly increase since the series began in 1967, helping lift the broader energy index 10.9%. The report offered the first clear read on how the latest oil shock is hitting consumers. The strain is now spreading to electricity bills as well. “Electricity is going to become the new oil,” Thummel said.
The U.S. Energy Information Administration, reported last week that U.S. power use is expected to reach record highs in 2026 and 2027 as AI-linked data centers drive demand higher, with natural gas expected to account for about 40% of U.S. power generation over that period.
“We’re starting to see an expansion of U.S. electricity prices,” Thummel said, arguing that a new wave of data-center construction is colliding with an electric system that was not built for such rapid load growth. He added that, “between now and 2050, we’re going to see probably a 95% increase in U.S. electricity demand.”
The estimates are rapidly turning into an expensive reality for U.S. consumers. The Associated Press reported this month that states and utilities are struggling to reconcile clean-energy goals with the electricity demands of new data centers, with some utilities warning they may need far more gas-fired generation to serve the load. Constellation Energy is still trying to accelerate the restart of the former Three Mile Island plant in Pennsylvania to help supply power tied to Microsoft data centers. It underscores Thummel's point about a renewed interest in nuclear power as tech companies hunt for reliable, stable sources of electricity.
Thummel said natural gas remains the most immediate answer because the U.S. has abundant domestic supply. “This is a competitive advantage,” he said, describing natural gas as one of the lowest-cost fuels for generating electricity. But he also warned of a bottleneck in turbine availability, saying the industry needs more infrastructure before that supply can fully translate into lower-cost power.
For consumers, that means energy bills are being shaped by two forces at once: a global oil shock that raises costs quickly, and a slower-moving buildout challenge in electricity that may keep pressure on utility bills even after the Iran War ends and the price of crude stabilizes.