U.S. Synthetic Oil Supply in Danger Through 2027JAY DIRECTO - Getty Images (JAY DIRECTO - Getty Images)The supply chain constraints brought on by the war in the Middle East will have long-lasting impacts on the price and available supply of automotive lubricants—namely motor oil, according to a new report from Automotive News. More specifically, the report currently projects that customers here in the States will have to look towards 2027 before any sort of return to normalcy takes place across the lubricant industry.The war with Iran has effectively cut off American access to petroleum reserves in the Mideast, which according to the Independent Lubricant Manufacturers Association (ILMA), accounts for around half of all of the Group III base oil we import here in the States. Three companies—Pearl GTL in Qatar, ADNOC in the United Arab Emirates, and Bapco in Bahrain—supply 44 percent of that oil on their own. Group III base oil is, notably, the main ingredient required in the production of synthetic oil, which is a mainstay of automotive modern engines.Jon Cherry - Getty Images (Jon Cherry - Getty Images)Not only has the closure of the Strait of Hormuz limited access to this crucial ingredient, but Iranian military strikes on the Pearl GTL facility will leave it operating at half capacity for at least a year. Normally, the U.S. would look to suppliers in South Korea for assistance, as they account for an additional 30 percent of Group III imports; our allies are also struggling to get supply out of the Middle East, however, which is only further exacerbated by 40-year highs on the margins for diesel and jet fuel. Producers are largely moving to sell finished products for high prices as opposed to supplying the lower margin base oils required for motor oil production.AdvertisementAdvertisementDealer service centers and lube shops are grappling with an uneasy supply chain for synthetic oils, though massive shortages haven’t arrived quite yet. That said, some brands are struggling to keep enough 5W-30 and 0W-20 synthetic engine oils on the shelf. According to AN, automakers like Toyota and Nissan have started advising their dealers on alternative options for these products. Both brands have even gone as far as rationing their current supply to prevent massive price hikes for customers.There is no simple fix here. Even if the conflict with Iran ended at this moment, there is still a lot of work to be done to stabilize the industry; AN’s report says it will take months to rebuild our supply to normal levels. Prices won’t drop until the U.S.’s strategic petroleum reserves are also replenished, however, and according to ILMA that will be around mid-2027 at the earliest. We aren’t suggesting you go out and panic-buy synthetic oil for your car ... but it might not be a bad plan to have a few quarts on deck.You Might Also LikeIf You Can Only Own One Car, Make It One of TheseThese Are the Most Popular Cars by State
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