The War with Iran is Making Oil Changes Costlier. A Deal Won’t Fix It
The war with Iran is making – The ongoing conflict with Iran has sent crude oil prices soaring, driving up the cost of derivatives such as gasoline, diesel, and jet fuel. These energy products have dominated headlines for months, but the impact of the war extends beyond fuel tanks and power plants. Motor oil, the essential lubricant that shields engines from wear, is also facing a sharp increase in price, though this trend has received less attention.
A Hidden Consequence: The Motor Oil Crisis
While the war’s effects on fuel prices are widely recognized, the rising cost of motor oil remains under-discussed. This critical component for vehicle maintenance is expected to become significantly more expensive for consumers in the near future. Even if a framework agreement is finalized this week, the issue is unlikely to resolve quickly.
“The base oil used to create synthetic motor oil has seen prices more than triple, reaching unprecedented levels,” explained Amanda Hay, a market analyst at Independent Commodity Intelligence Services, in an email to NPR.
Historically, synthetic motor oil was a specialized product, often used in luxury cars. However, its demand has grown as more vehicles now require high-performance lubricants. Despite the term “synthetic,” it is derived from crude oil or natural gas, processed through advanced methods to produce a thinner, longer-lasting oil. Most refineries, though, lack the capacity to manufacture this type at scale.
Hay highlighted that the U.S. has the largest trade deficit for group III base oil, the type essential for synthetic motor oils. Holly Alfano, CEO of the Independent Lubricant Manufacturers Association, noted that over 45% of the country’s imports of this oil originate from the Middle East. This dependency has been strained by the Strait of Hormuz, a critical shipping route, which has seen reduced traffic due to the conflict.
Disruptions and Delays in Supply Chains
Compounding the issue, the Shell Pearl GTL plant in Qatar — the world’s largest facility producing group III base oil — was damaged by an Iranian missile in March. Hay estimates that half its production capacity will remain offline for at least a year. This setback, combined with the Strait of Hormuz disruptions, has created a tight market for base oil.
Alfano pointed out that South Korea, another major supplier of group III base oil, is still reliant on Middle Eastern crude. This dependency means that any further tensions in the region could worsen the shortage. Meanwhile, U.S. refineries face a tough choice: producing less advanced group II base oil for conventional motor oil or focusing on diesel fuel, which offers higher profits.
Currently, group II base oil is in “really short supply,” according to Alfano. This scarcity is putting pressure on the industry, as refineries struggle to balance the need for both products. Even if the Strait of Hormuz reopens, it may not immediately alleviate the situation, given the prolonged damage to the Pearl plant and ongoing economic incentives to prioritize diesel over lubricants.
Broader Market Implications
Alfano emphasized that the shortage is not yet an outright crisis, but “supply gaps” are expected to emerge. These gaps will primarily affect motor oils branded by specific automakers, which may command premium prices. Across the market, however, the broader trend is clear: prices are likely to remain elevated.
For now, the industry is relying on existing stockpiles of base oil to mitigate the impact on retail customers. As these reserves deplete, the full weight of the price hikes will begin to settle on consumers. Nathan Matheson, owner of Nathan’s Small Engine Repair and Automotive Services in Poolesville, Maryland, reported that “regular motor oil has risen by 60%,” according to his observations.
“We’ve kept our oil change prices steady, absorbing the cost as a hit to our profit margins,” Matheson said. “But it’s only a matter of time before we have to pass this on to customers.”
Meanwhile, the war has amplified other cost pressures on the automotive sector. Matheson noted that rising expenses from President Trump’s tariffs, which were recently upheld by the Supreme Court, continue to affect the industry. While some tariffs were lifted, others, including those on auto parts, remain in effect, adding to the financial strain.
Alfano warned that the combination of supply chain disruptions and lingering tariffs will create a challenging environment for both consumers and businesses. The U.S. is also in the process of building new facilities to boost group III base oil production, but these projects are not expected to come online until 2027 or 2028. Until then, the market will likely face continued shortages and higher prices.
Hay concluded that the most probable outcome is “fewer, more expensive choices” for consumers. While the war may eventually ease, the ripple effects on the motor oil market are expected to persist. For drivers, this means not only higher costs at the pump but also a growing burden at the mechanic’s shop. As the industry adjusts to these new realities, the price of a simple oil change could become a more significant expense in everyday life.
