A mechanic was observed pouring motor oil into a funnel at a Chevron gas station in Albuquerque, New Mexico, in July 2016. Since the onset of the war with Iran, the cost of Group III base oil—used in motor oil blends—has surged by 175%, according to a trade group.
The conflict in Iran has led to increased prices for crude oil and its derivatives, including gasoline, diesel, and jet fuel. While these have been highlighted in the news, the rising cost of motor oil, which protects car engines from wear, is another significant concern. An oil change might be more expensive now, and this situation is unlikely to change soon.
Amanda Hay, an analyst at Independent Commodity Intelligence Services, mentioned via email to NPR that since the war began, the price of the base oil used in synthetic motor oils has tripled to unprecedented levels. Although the U.S. exports gasoline, diesel, and jet fuel, it imports more base oil than it produces domestically. Synthetic motor oil, though derived from crude oil or natural gas, undergoes complex engineering processes, leading to a thinner, longer-lasting oil. Most refineries in the U.S. lack this manufacturing capability.
The U.S. has the world’s largest trade deficit in “group III base oil,” necessary for synthetic motor oils.
More than 45% of the U.S. imports of Group III base oil originate from the Middle East, and this trade has faced disruptions due to reduced traffic through the Strait of Hormuz. Additionally, the Shell Pearl GTL plant in Qatar, the world’s largest facility producing this type of oil, suffered damage from an Iranian missile, impacting supply for at least a year.
Potential alternatives include sourcing base oil from South Korea, another major supplier. However, South Korea also relies on crude from the Middle East. Meanwhile, U.S. refineries can produce less advanced “Group II” base oils, which might substitute for shortfalls in synthetics. But these refineries must choose between producing lubricants or diesel, and diesel is currently more profitable, resulting in a shortage of Group II oils as well.
If the Strait of Hormuz reopens, base oil from South Korea might stabilize, but the closure at Pearl and diesel prioritization will extend into next year. The U.S. has future plans for plants that will boost Group III production, but they won’t start until 2027 or 2028. Fewer, more costly options are expected, potentially leading to supply “gaps,” particularly for motor oil associated with specific automaker brands.
The industry has relied on base oil stockpiles to cushion retail pricing impacts. But these reserves are depleting, according to Holly Alfano, CEO of the Independent Lubricant Manufacturers Association. Nathan Matheson, owner of an auto repair shop, pointed out that regular motor oil prices have increased by 60%. He’s been absorbing these costs, but tariffs on auto parts continue to pressure margins.
Some customers, like those of Onur Azeri in Arizona, are more concerned about part costs than motor oil. Higher gasoline and diesel costs have led many to drive less, with some switching to electric bikes for commuting. Delaying repairs has become a common question among customers, though Matheson advises against postponing necessary maintenance to avoid higher costs later.
Alfano recommends checking vehicle manuals for manufacturer-recommended motor oil. Adhering to these guidelines is crucial. Modern synthetic oils may also extend the interval between oil changes beyond the outdated 3,000 to 5,000 miles.
For repairs, Matheson urges obtaining multiple opinions. Delaying maintenance can result in costlier repairs. For instance, neglecting a $160 service can lead to a $2,000 repair. It’s essential to address necessary repairs promptly.