A mechanic pours motor oil into a funnel inside a Chevron Corp. gas station in Albuquerque, N.M., in July 2016. The cost of group III base oil, used in motor oil blends, has risen 175% since the start of the war with Iran, according to a trade group. Sergio Flores/Bloomberg via Getty Images hide caption toggle caption Sergio Flores/Bloomberg via Getty Images
The war in Iran has escalated crude oil prices, affecting gasoline, diesel, and jet fuel. However, motor oil prices—used to safeguard your vehicle’s engine—have also been impacted. With prices of base oil used for synthetic motor oil blends tripling, the next oil change will likely be costlier.
Base oil, the key component for synthetic motor oils, is not widely produced in the U.S., making the country a net importer. Amanda Hay from Independent Commodity Intelligence Services highlights the increase in base oil costs since the conflict began.
Impact on Motor Oil Supply
Ordinary vehicles increasingly favor synthetic motor oils for enhanced performance. Synthetic oil, although derived from crude oil, undergoes advanced processing. Most refineries lack the capability to produce it efficiently.
The U.S. faces a trade deficit in group III base oil, heavily relying on imports from the Middle East. Supply disruptions through the Strait of Hormuz and damage to Qatar’s Shell Pearl GTL facility have complicated matters. Approximately 45% of U.S. imports come from the Middle East.
Alternatives and Challenges
South Korea serves as another supplier but is dependent on Middle East crude. U.S. refineries can produce less advanced group II base oils, usable for conventional oils. Yet, production priorities tilt towards diesel fuel due to higher profitability.
Potential solutions involve reopening the Strait of Hormuz. Nevertheless, Pearl’s shutdown and diesel’s market advantage persist. New U.S. plants aiming to produce group III base oils won’t open until 2027 or 2028.
Price Increases Ahead
Prices soar, though total shortages aren’t expected. Retail inventories have cushioned the blow, but stockpiles deplete. Higher prices are apparent. Nathan Matheson from Nathan’s Small Engine Repair notes motor oil’s 60% price increase causing strain.
Tariffs on auto parts have compounded rising costs. Matheson mentions increased expenses for everyday parts like oil filters and brake pads.
Consumer Adaptations
Drivers modify their behavior, driving less, and in some cases, using electric bikes for commuting. Customers delay repairs, seeking essential fixes. Matheson shares his experience with postponed repairs due to component costs.
Guidance for Drivers
Alfano recommends consulting vehicle manuals for oil specifications to ensure compatibility and performance. High-end synthetic oils may offer extended mileage between changes.
Matheson advises obtaining multiple perspectives for vehicle repairs and prioritizing preventive maintenance to avoid costly repairs later.
Ignoring necessary maintenance can lead to significant expenses, as evident in cases transitioning from minor fluid changes to hefty component replacements.