Auto industry braces for motor oil shortage

By Matt Egan, CNN

New York (CNN) — Wholesale motor oil prices are rising rapidly, and some industry executives are warning of imminent shortages caused by the war with Iran.

Damage to key facilities in the Middle East and the shutdown of the Strait of Hormuz have combined to create a perfect storm in this tiny but critical corner of the oil market.

The risk is that some of the most popular kinds of motor oil will be in very short supply, forcing drivers to delay getting their oil changed or rely on suboptimal lubricants.

“We’re looking at shortages — I have no doubt in my mind,” Holly Alfano, CEO of the Independent Lubricant Manufacturers Association (ILMA), an industry trade group, told CNN. “It’s a big mess — and it’s not going to be resolved quickly. It could take a year or so before we see any real relief.”

The most important motor oil

Tom Glenn, president and founder of Petroleum Trends International and publisher of industry publication JobbersWorld, has chronicled the multiple rounds of dizzying price hikes on motor oil since the war started.

“Three rounds of price increases over two and a half months is unheard of. And the magnitude is stunning,” Glenn told CNN. “I’ve been in this business since 1979, and I’ve never seen anything quite like this.”

In a normal year, motor oil producers would increase prices for distributors by 70 to 80 cents a gallon. But already this year, Glenn said, some producers have lifted prices on distributors buying in bulk by $5 or more a gallon.

These price hikes are being driven by a combination of higher prices for crude oil, base oils, additives, transportation, packaging and logistics.

Not only are prices rising, but ILMA warns of an “imminent shortage” of low viscosity grade oils, including 0W-16, 0W-8 and 0W-20 — which is the most important grade of motor oil on the market today.

It’s the go-to motor oil for newer vehicles, accounting for roughly one-third of total passenger car motor oil demand last year, according to Petroleum Trends International.

‘Safety valve is effectively closed’

The motor oil situation is another reminder of the fragile nature of global supply chains.

The problem is that almost half (44%) of the most important base oil used to make motor oil, known as Group III, comes from just three Persian Gulf producers, according to ILMA.

Those Middle East supplies have been derailed by the closure of the Strait of Hormuz after the war started in late February.

Not only that, but Pearl GTL, the world’s largest gas-to-liquids (GTL) plant located in Qatar, was attacked and seriously damaged in Iran. That means one of the leading suppliers of Group III base oils has been knocked offline indefinitely.

“The US is expected to run out of Mideast Gulf-origin Group III by June,” ILMA said in a bulletin published last week.

Normally, the United States would turn to South Korea to fill the gap, but Asian refiners rely on the Strait of Hormuz for much of their crude. And Asian refiners that do have access to crude are focused on making as much jet fuel and diesel as they can to capture historically high profit margins.

Motor oil can also be made with Group II base oils, but those are also being diverted to diesel to meet demand and historically high margins.

“The Group II safety valve is effectively closed,” ILMA said in its bulletin.

Talks with Trump administration

Alfano, the ILMA CEO, said her group is hearing anecdotal reports that certain parts of the United States are already facing shortages.

“It’s going to really get intense this summer,” she said.

Alfano said the industry has been in communication with the Energy Department, including talks on Friday with lieutenants to Energy Secretary Chris Wright.

“They are turning over every stone. I have been impressed with that,” Alfano said. “Unfortunately, there is not a whole lot they can do. There is no easy answer.”

She noted that while there are two new lubricant production facilities slated to come online in the United States, they are not expected to start until next year.

“The President and his entire energy team anticipated short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said in a statement, pointing to steps including waiving the Jones Act.

Rogers said the administration is working closely with the private sector and industry to address concerns, “explore potential actions, and inform the President’s policy decisions.” She added that energy markets will stabilize and prices will “plummet” as Trump works to end the conflict.

The Department of Energy is “ready to take additional action, if needed, to help avoid supply disruptions,” Ben Dietderich, the press secretary for the Department of Energy, said in a statement.

Valvoline — which operates 2,400 retail oil change service centers — said in a statement that it has not significantly raised prices and has “adequate supply to serve our customers today and for the foreseeable future.”

Valvoline said it’s working closely with its supplier to “proactively manage any potential impact from the current market environment.”

Representatives for leading auto parts retailers, including AutoZone, Advance Auto Parts and Jiffy Lube did not respond to requests for comment.

Mason Hamilton, chief economist at the American Petroleum Institute, said the trade group is “closely monitoring how the conflict in the Middle East may affect the motor oil market.”

Hamilton noted that API, which helps set standards for engine oil specifications, has already invoked emergency provisional licensing to give companies flexibility to pivot to alternative base oil supplies not impacted by the war.

Michael Chung, senior director of market intelligence at the Auto Care Association, a trade group that represents automotive suppliers, distributors, maintenance and repair companies, told CNN that drivers should expect to feel yet another hit to their wallet, even if they delay maintenance that isn’t critical.

“We are still bullish on the aftermarket, but we recognize there are going to be supply chain challenges with motor oil availability and prices in the short term,” Chung said. “We expect it to translate to higher prices ultimately for the consumer.”

‘Quitting is not an option’

Glenn, the JobbersWorld publisher, said that while he is concerned about shortages of motor oil, workarounds will likely be found because the alternative is untenable.

“America is not going to stop driving cars. Trucks are not going to stop delivering goods. We’re not going to come to a grinding halt,” Glenn said.

One option for the industry to proactively manage demand, according to Glenn, is that automakers will temporarily authorize the use of slightly higher viscosity motor oil that require much less Group III base oil.

Other band-aids include changing the recommendations from automakers on how frequently they recommend vehicle owners get oil changes, and producers temporarily relying more on Group II base oil to make motor oil.

Of course, there are costs to those stopgap solutions, including potentially damaging or compromising the long-term viability of engines.

“It will be ugly to see how this is done,” Glenn said. “But I think they will find a solution. Quitting is not an option. We’ll find a way to keep America moving.”

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.