The ‘imminent’ oil crisis isn’t at the pump—it’s under your hood

Prices at the pump have surged and global fertilizer shortages are spreading because of the war in Iran, but the most immediate supply chain crisis hitting consumers may be one that arrives every 5,000 miles: the routine engine oil change.

Despite the United States’ world-leading oil production and refining capacity, the country is increasingly dependent on Middle Eastern supplies for the specific base oils that comprise most modern motor oils and lubricants. Now, lubricant refiners, automakers, and oil change service stations are sounding the alarm—prices are spiking, and supply shortages will hit in June.

The catalyst is the ongoing closure of the Strait of Hormuz since late February. Spot prices for the affected base oils have nearly tripled to all-time highs, while many motor oil prices are up roughly 35% and still climbing, according to industry analysts.

The Independent Lubricant Manufacturers Association has warned of a “global base oil supply crisis” and an “imminent shortage” of low-viscosity motor oils—the most common grades used in newer vehicles today.

“[Auto shops] are being warned by their suppliers that availability will be a problem in June, and certain types of oil will become more scarce,” said Michael Chung, senior director of market intelligence for the Auto Care Association. “They’re actually expecting a huge [motor] oil price increase in June.”

Chung told Fortune that more people are expected to delay oil changes as prices rise, triggering a temporary dip in demand. Even so, the situation hasn’t yet reached a point where shops cannot perform the service.

“People are doing the things that are urgent, but waiting on things that aren’t so critical. I just feel like the consumer is a punching bag these days,” Chung said. “It’s inflation from all sides and the stress of everything that’s going on in the world. Customers have basically been absorbing costs.”

The crux of the problem lies with so-called Group III base oils, primarily sourced from the Middle East. About 60% of those base oils go toward motor oil and other automotive applications, but they also supply critical lubricants for industrial manufacturing, agriculture, and the military—all........

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