The latest suffering drivers are already dealing with rising prices at the pump: the prospect of a more expensive oil change… or worse. Reports of a shortage of motor oil on social media have been circulating for almost a week.
Experts say there’s no reason for drivers to panic – or deviate from your normal car maintenance routine – but whether you’re taking your car to a mechanic for an oil change or doing it yourself, there are a few important things you should know.
“Your next oil change could be a bit of a headache,” says Patrick De Haan, petroleum analyst for GasBuddy. “Availability should not be too much of a problem, [but] there may be a temporary change in the type of oil you can use in your vehicle.”
In other words, “If you have to change the oil, you might not want to wait” until the last minute, he suggests.
Why are people worried about scarcity?
Talk about an oil leak: Leaked internal letters from auto companies to their executives suggest it’s running low.
Costa Kapothanasis, CEO of Costa Oil, a chain of oil change shops, told X last week that Toyota had sent a memo to its dealers and the direction of its service departments. It detailed how to change oil types in two special systems used in Toyota’s new hybrids and vehicles, including popular models such as the Camry and Corolla.
Toyota did not respond to Mooney’s request for comment, although automotive website The Drive noted on Wednesday that the report appears to be true. On Thursday, The Drive reported that Nissan made a similar announcement to their commercial departments. The carmaker confirmed the authenticity of the notice but said it had not yet been distributed to its dealer network.
However, the picture painted by these messages is still misleading. Traders may have to deal with their oil quota being cut by 45% from last year, and the report referred to “supplier-driven price adjustments…
What is causing the problem?
To understand what’s going on, it helps to know a little about this often overlooked part of the oil industry: Despite the name, synthetic motor oil – which is recommended, if not required, in many new cars today – is still derived from petroleum. Up to 98% of each quart contains a semi-refined feedstock called Group III base oil.
And right now, Group III base oil is almost impossible to find, the damage to the supply chain from the war in Iran. About 44% of US goods come from the Middle East. The successful closure of the Strait of Hormuz blocked that supply. To make matters worse, a Qatari facility that produces a large amount of base oil was severely damaged in March. According to the Independent Lubricant Manufacturers Association, or ILMA, the US will completely run out of Middle East Group III oil next month.
The main “safety valve” for Group III assets is the South Korean filters. But they get their crude oil through the Strait of Hormuz, too, turning that option into a foregone conclusion. And the remaining industries that can produce it also make diesel and jet fuel – the most important products for both producers and consumers right now.
This means consumers could start seeing empty shelves at auto oil stores soon, Kapothanasis suggested in a separate tweet last week. “I just found out that Mobil and Shell have told Costco and Walmart that they have no packaged product to ship and expect empty shelves in the motor oil section in a few weeks,” he wrote.
In an article published Friday, the Carscoops blog reported on a leaked memo AutoZone allegedly sent to store managers in the Southeast. The notice warned that “future supply shortages” could result in the supply of motor oil and other motor fluids being reduced by as much as 40%.
The message was not specific, he says, “We are facing the largest lubricant shortage in modern American history.” It goes on to warn, “Some products… will not be available at all.”
The money went to Costco, Walmart, Advance Auto Parts, AutoZone, NAPA, Jiffy Lube and Valvoline. No comments were made. For now, things seem to be holding up, although some social media users have reported scattered incidents of empty shelves or out-of-stock notices when trying to buy oil.
What do drivers need to know?
First, the good news: “People will be able to find motor oil. It may not be exactly what they want to use. [or] that they used to use,” said Caitlin Jacobs, ILMA’s director of communications.
Automakers often have their own motor oil blends that contain a proprietary blend of additives, but Jacobs predicts that automakers will provide dealer service departments with guidance on replacements, so drivers don’t have to worry about damaging their engines or voiding their warranties if they have to switch to a different oil.
“It’s much better to have something that might be a little different than not changing your oil,” he advises.
But you may find yourself digging deeper into your wallet. “It will be more expensive, probably,” De Haan said. AutoZone’s memo also warned store managers, “Costs will rise, often dramatically,” and outside suppliers’ regular schedule for price adjustments.
How much you’ll pay depends on variables such as whether the exact build you need is done by your owner’s manual. There has already been an unprecedented wave of price increases in the supermarket market, however, with some product costs rising up to 30% in a matter of weeks.
How long this shortage of motor oil and the resulting inflation will last will remain a matter of how long the Strait of Hormuz remains closed to traffic, but extensive damage to a major Group III production facility in Qatar means that even the best-case scenario calls for months of disruption.
“From our perspective, we don’t expect basic oil market conditions to return to normal until the middle of next year,” Jacobs said, and it could be a long time before remarketing hits service centers and store shelves, he adds. “For now, we’re looking at a good year or so.”
