A 10-quart case of Kirkland Signature full-synthetic motor oil used to cost around $30 at Costco. It now costs $57.99, and the warehouse chain has told members they can only buy two cases a week. Mobil 1's six-pack of quart bottles is capped too, at five per membership, according to reporting by The Auto Wire and Fox Business.
That is not a pricing gimmick. It is the visible end of a supply chain that runs backward through South Korean refineries, Gulf export terminals and a pipeline in Saudi Arabia that keeps getting hit by drones. The Financial Times reported this week that the retailer is rationing motor oil as the Iran war chokes off the global supply of the lubricant base oils that go into it. For a company built on selling bulk goods cheap, a purchase limit on a $58 case of oil is itself the headline.
Why an oil change got expensive
The product at the center of this is Group III base oil, the feedstock behind most modern synthetic motor oil. Holly Alfano, chief executive of the Independent Lubricant Manufacturers Association, told Newsweek in mid-September that the price of Group III has jumped 235 percent since the war in the Middle East began, according to one industry source she cited. The reason is straightforward geography: about 40 percent of U.S. supply of Group III comes from the Middle East, where production facilities sustained physical damage during the war, she said, and another 30 percent of supply comes from South Korea, which has relied on crude oil from the Middle East — all of which has been compounded by the closure of the Strait of Hormuz, raising shipping costs and lengthening timelines.
Refiners, meanwhile, have little incentive to prioritize lubricant stock. With crude oil trading near multi-year highs, converting a barrel into gasoline or diesel earns more than converting it into base oil. Fox Business noted that synthetic motor oil relies heavily on Group III base oils produced by refining crude oil, and a significant share of what the U.S. uses is imported from Persian Gulf producers where the conflict has tightened availability. This isn't a new complaint — Alfano was warning about it back in May, when she told CNN "We're looking at shortages — I have no doubt in my mind. It's a big mess — and it's not going to be resolved quickly. It could take a year or so before we see any real relief." Tom Glenn, publisher of the trade outlet JobbersWorld, described a pace of increases he called unprecedented in his decades in the business, saying at the time that "Three rounds of price increases over two and a half months is unheard of. And the magnitude is stunning. I've been in this business since 1979, and I've never seen anything quite like this."
For drivers, the practical effect so far has been price, not empty shelves. Newsweek reported that the immediate effect is likely to be higher prices and fewer low-cost options rather than motor oil disappearing altogether, though it noted certain synthetic products could become harder to find if the shortage persists. Costco's competitors haven't followed with rationing of their own: Newsweek found Walmart selling equivalent name-brand synthetic oil at roughly $32 per 5-quart jug, and AutoZone selling a pack of two Mobil 1 bottles for $40.99. Kirkland's old $30 price made it the bargain option; at $58, it now sits closer to what its rivals already charge.
A pipeline, a strait, and a contract that didn't get honored
The base oil squeeze is a symptom of a bigger supply story playing out at the same time. Saudi Aramco told at least two European refining customers they would receive no crude at all next month, Bloomberg reported, after drone attacks forced the shutdown of the kingdom's East-West pipeline to the Red Sea — the route Europe's term-contract buyers depend on. Reuters reported that the decision applies to all of Aramco's European buyers, with the disruption already pushing Poland's Orlen to source replacement crude from the North Sea.
There is a counter-current, though it is a modest one. Bloomberg reported that Admiral Brad Cooper, head of U.S. Central Command, said oil and LNG shipments through the Strait of Hormuz over the past two weeks hit their highest level in six months, crediting naval escorts and mine clearance — with Gulf allies having moved more than a billion barrels of crude through the strait "in the last couple months." Brent crude, which climbed above $108 a barrel in the days after the worst of the Houthi attacks on Saudi Arabia according to Newsweek's reporting, settled more recently at $103.21/bbl a barrel, with WTI at $99.53/bbl, per market data — high enough to keep the fuel-versus-lubricant math tilted against base oil, but off the panic peak.
None of that resolves the underlying bottleneck. Alfano told Newsweek that given the time needed to rebuild damaged Group III production facilities in the Middle East, and with the war ongoing, the market isn't expected to normalize until the end of next year at the earliest — and that additional Group III production being built in the U.S. won't be ready until then either. Until it is, a warehouse club that made its name selling everything in bulk will keep counting cases at the register, and the price of an oil change will keep tracking a war fought thousands of miles from the driveway.
