Rising Gas Prices and Soaring Oil Change Costs: How Iran Conflict Disrupts U.S. Lubricant Supply

The ongoing military conflict with Iran continues to strain the world’s oil supply, and Americans are already feeling the impact at the pump. But the ripple effects are spreading, and vehicle owners will soon face steeper costs for maintenance as well.

According to the Independent Lubricant Manufacturers Association (ILMA), representatives recently met with the U.S. Department of Energy to address growing concerns over shortages of base oil supplies. Base oils are categorized into four groups, but it is Group III—used primarily in synthetic motor oil—that poses the most significant threat to consumers.

Group III base oils are essential for automotive applications, accounting for 60% of their use. Nearly 45% of these oils originate from the Persian Gulf, either from tankers unable to navigate the Strait of Hormuz or from production facilities currently offline due to the conflict.

The ILMA warns that resolving the shortage won’t be straightforward. South Korea, which supplies about 30% of U.S. Group III imports, relies heavily on crude oil shipments from the Persian Gulf. While refiners may attempt to shift to alternative sources, lower yields are expected.

Adding to the problem, U.S. oil producers lack the capacity to fill the gap. While domestic refiners like Chevron and ExxonMobil are expanding production, their new facilities won’t be operational until next year. Even then, re-refining existing oils remains limited by feedstock shortages.

The laws of supply and demand are in full effect: as oil supplies tighten, U.S. consumers will face higher prices at the pump and steeper costs for oil changes and other automotive lubricants.

Vehicle owners, particularly those with General Motors (GM) vehicles, may feel the pinch first. GM’s Dexos oil products depend on Group III base oils, making it harder—or more expensive—for owners to obtain the correct lubricant. The ILMA has urged GM to allow temporary flexibility in Dexos blends to ease the transition, but GM responded with sympathy without granting concessions. In a letter to the ILMA, GM acknowledged the supply constraints but encouraged additive companies and oil marketers to submit technically justified alternative Group III options.