War with Iran Triples Base Oil Prices for Lubricants

The ongoing war with Iran has caused the price of base oil, a primary component of synthetic motor lubricants, to more than triple. The price surge follows a March Iranian missile strike on the Shell Pearl GTL plant in Qatar, the world's largest facility of its type, which is not expected to resume full production for at least a year. Trade disruptions through the Strait of Hormuz have further limited supplies to the United States, which relies heavily on Middle Eastern imports for group III base oil.

Global production has faced additional setbacks in South Korea due to its dependence on Middle Eastern crude. In the U.S., the shortage is compounded by refineries prioritizing diesel production over lower-grade motor oils. While existing stockpiles initially cushioned consumers from the price spikes, those inventories are now depleting, leading to costs for mechanics and auto repair shop owners increasing by approximately 60%.

Industry experts expect supply gaps and high prices to persist into next year, as new U.S. production facilities are not projected to open until 2027 or 2028. These costs are coinciding with rising prices for gasoline and diesel, as well as increased costs for consumable auto parts like filters and brake pads due to tariffs.