Auto industry braces for motor oil shortage

Motor oil prices are rising sharply, with industry executives warning of imminent shortages caused by the conflict in the Middle East. The closure of the Strait of Hormuz and attacks on key facilities, including Qatar’s Pearl GTL plant—the world’s largest gas-to-liquids facility—have disrupted supplies of Group III base oils, which account for 44% of production for critical low-viscosity motor oils like 0W-16 and 0W-20. The Independent Lubricant Manufacturers Association (ILMA) reports that the U.S. could exhaust its stock of Middle East-sourced Group III base oils by June. Normally, South Korea would fill the gap, but Asian refiners are prioritizing jet fuel and diesel production due to high demand and profit margins. Even Group II base oils, an alternative for motor oil, are being diverted to diesel, leaving little supply for lubricants. Price hikes have already exceeded $5 per gallon in some cases, far surpassing the usual annual increase of 70-80 cents. Tom Glenn, president of Petroleum Trends International, called the situation unprecedented, noting three price spikes in just two and a half months. Holly Alfano, ILMA CEO, confirmed shortages are already appearing in some U.S. regions and warned conditions will worsen this summer. ILMA has engaged with the U.S. Energy Department, including discussions with officials under Secretary Chris Wright, though solutions remain unclear. The crisis highlights vulnerabilities in global supply chains, with nearly half of critical base oils reliant on three Persian Gulf producers now disrupted by war-related closures and attacks.