Lower‑income households are feeling the brunt as gasoline climbs past $4.50 a gallon, a spike that began after Iran closed the Strait of Hormuz. The Federal Reserve Bank of New York says the surge has hit the bottom third of earners hardest, forcing them to cut travel or switch to public transit in the current economic climate and rising costs today.

The analysis, titled “A K‑Shaped Pattern at the Pump,” shows higher‑income drivers increased spending, yet their volume stayed flat after adjusting for inflation. Conversely, lower‑income families spent more per gallon but bought less fuel, trimming trips or opting for carpooling. Wage growth for the bottom 50 percent has lagged behind the 5.6 % gains enjoyed by the top tier in the last year.

Oil prices have leapt more than 50 % from pre‑war levels, and the New York Fed warns that a prolonged Strait closure could push a barrel past $167, translating to $5 a gallon and energy inflation that could threaten a recession. Investors watch the market closely as higher fuel costs weigh on GDP growth and consumer spending in the next quarter.