Why The War In Iran Is Going To Impact Your Next Oil Change

At the center of the issue is Group III base oil, a key component in modern engine oils. ILMA estimates that roughly 44 percent of U.S. demand for these base stocks is typically sourced from the Persian Gulf region, where production and exports have been heavily affected.

Damage to a major gas-to-liquids facility in Qatar has taken a large volume of supply offline, with repairs expected to take months, if not longer. Additional constraints stem from production interruptions in Bahrain and the United Arab Emirates, along with shipping bottlenecks tied to the closure/blockade of the Strait of Hormuz.

Alternative supply routes are limited. South Korea, another major exporter of Group III base oils to the U.S., relies on crude imports from the same region, which could reduce output even if refiners shift to different feedstocks. Domestic production capacity in North America is also not an option, with new projects from Chevron and ExxonMobil not expected to come online until later in the decade.

The effects are already being felt across the supply chain. Some lubricant producers have begun rationing shipments or increasing prices as availability gets worse. There are also indications that refiners could shift output toward more profitable fuels, further reducing base oil supply.

Automotive applications account for a majority of Group III usage, and ILMA has asked for temporary flexibility from industry bodies such as the American Petroleum Institute to help maintain the supply of certified lubricants. In other sectors, including industrial and metalworking applications, manufacturers may turn to substitute base oils where possible.

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