U.S. Motor Oil Supply Tightens After Strait of Hormuz Closure

The United States is increasingly dependent on Middle Eastern supplies for the Group III base oils that make up most modern motor oils and lubricants. The closure of the Strait of Hormuz since late February has cut off shipments from three major production sites in Qatar, Bahrain, and the United Arab Emirates.

Spot prices for the affected base oils have nearly tripled, and many motor-oil retail prices have risen roughly 35 percent, according to industry reports. The Independent Lubricant Manufacturers Association has warned of a global base-oil supply crisis and an imminent shortage of low-viscosity grades used in newer vehicles.

Michael Chung, senior director of market intelligence for the Auto Care Association, said auto shops have been told that availability problems will appear in June and that certain oil types will become more scarce. He added that shops expect a large price increase next month.

Costa Kapothanasis, CEO of Costa Oil, posted a photo of canola oil being poured into an engine and shared internal memos from Toyota and Nissan warning of shortages. Nissan stated it is allocating lubricant supplies at 55 percent of prior-year volumes.

U.S. history, with supplies down roughly 40 percent.

Tom Glenn, president of Petroleum Trends International, said modern motor oils require specialized Group III base oils and that reformulation efforts face technical, safety, and regulatory hurdles. The American Petroleum Institute has issued emergency provisional licensing to allow use of alternative base oils while standards are maintained.

Exxon Mobil is expanding Group III production at its Baytown, Texas complex, with completion expected in 2028. Chevron plans to bring similar capacity online at its Pascagoula, Mississippi refinery by the end of 2025 or early 2027. U.S. Group III supplies come from the Middle East and that damaged facilities will keep output below normal levels even after the strait reopens.