How Current Global Conflicts Impact Lubricant Prices
Geopolitical tensions, such as the ongoing conflict in Iran, are creating significant challenges for the lubricants industry and its global partners. The region’s instability, particularly around the vital Strait of Hormuz, has disrupted the flow of crude oil and base oil supplies, key components in lubricant production.
These disruptions have led to heightened supply chain uncertainties, increased transportation costs, and volatile pricing in the market. Businesses that rely on lubricants are feeling the impact, as unpredictability in costs and availability creates added pressure to maintain operations and profitability.
We want to give you the complete picture of why these changes are happening. You deserve to understand the extraordinary global forces driving your operational costs. This guide explains the root causes of current supply constraints, how they specifically impact engine oils, and what we are doing to ensure your supply remains uninterrupted.
What is the Strait of Hormuz?
To understand the current state of the lubricants market, we must look at a critical geographic chokepoint: the Strait of Hormuz. This narrow waterway separates Iran from the Arabian Peninsula, connecting the Persian Gulf to the open ocean. Under normal conditions, roughly 20 million barrels of oil pass through this strait every single day. This represents an incredible 25% of the world’s entire seaborne oil trade. (Britannica)
Since early March 2026, the Strait has been effectively closed. Daily tanker transits have collapsed to a fraction of their normal volume. Gulf producing countries, unable to load their oil onto outbound tankers, have been forced to cut production entirely.
Is this truly an unprecedented time?
We have certainly navigated turbulent supply chain waters before. During the COVID-19 pandemic, the industry faced severe shortages of the chemical additives required to blend engine oils. Refineries shut down, shipping stalled, and manufacturers scrambled to find solutions. The current situation closely mirrors those pandemic-era bottlenecks. However, instead of a health crisis halting production, geopolitical conflict has effectively locked the raw materials away from the global market.
Why Lubricants Take the Hardest Hit
You might wonder why a waterway closure halfway around the world affects the price of the oil you put in your vehicles and equipment. The answer comes down to how lubricants are made. Engine oil is not crude oil. It is a highly refined, downstream product made primarily from base oil. When crude supply tightens, refineries process less oil, and base oil production falls in lockstep.
What are Group III base oils?
Full synthetic lubricants rely heavily on Group III base oils. Group III base oils are made using higher pressure and heat than Group I and II, resulting in purer base oils that are preferred (or in some cases, non-negotiable) in many formulations for high-quality, synthetic lubricants. (Machinery Lubrication)
Right now, a massive portion of the world’s supply of Group III oil for full synthetics is completely halted. Furthermore, recent drone strikes on major production facilities in the Middle East mean that even if the conflict ended today, a significant portion of base oil supply would remain offline for months at minimum. This is exactly why full synthetic prices are rising much faster than conventional oils or synthetic blends.
Refiners Prioritize Fuel Over Base Oil
Conventional oil and synthetic blends are not immune to these challenges. These products typically use Group I or Group II base oils. Right now, the Middle East disruptions have triggered a worldwide shortage of diesel and jet fuel.
Refineries in the United States currently make significantly more money prioritizing diesel and jet fuel production over base oil production. For refiners to switch their operations and make more base oil, the market price of base oil has to rise to make it worth their while.
Additionally, global refiners are facing immense pressure from international markets. As regions like Asia and Europe quickly run out of oil supply due to the Strait closure, their desperation grows. European vehicles require incredibly strict lubricant formulations, leaving them with very few options to pivot to alternative base oils. As European and Asian markets offer to pay premium rates to secure whatever oil is available, suppliers raise their prices across the board. North American lubricant manufacturers must pay these elevated prices simply to keep the materials flowing into the country.
The Ripple Effect on Additives and Distribution
The challenges do not stop at base oils. The chemical additives that give your lubricants their specific performance properties come from the exact same disrupted petrochemical supply chains. As crude oil flow constricts, additive costs surge in parallel with base oil costs.
Beyond the raw materials, this conflict impacts everyday logistics. We have all seen the effect this disruption has had on standard fuel prices at the pump. Higher fuel prices dramatically increase the cost to move goods around the country. This drives up the broader industry costs related to packaging, warehousing, and distributing our products to your doors.
What This Means for Lubricant Pricing & Possible Alternatives
Every major brand supplier in our portfolio — across base oils and additives — has issued at least one cost increase to us in April 2026. These are not modest adjustments, either. Industry sources confirm that major suppliers including ExxonMobil, Shell (SOPUS), Chevron, Phillips 66, Castrol, Valvoline, TotalEnergies, and others have implemented increases in this period alone. (clipperoil.com)
As these challenges unfold, it’s essential to know that U.S. Lubricants continues to stand strong for our customers. We are not only adapting to global pressures—we are leveraging our expertise and partnerships so we can continue to provide fluid solutions that meet your needs.
What can you do to ensure supply & how can U.S. Lubricants help?
As a business owner, you’re probably wondering: what can I do to help ensure supply continuity for my shop or fleet? One consideration to make is if you currently dexos® certified products. Dexos products are only required to be used in General Motors (GM) vehicles under warranty.
Even in normal times, dexos products must go through extensive testing and lengthy approval processes to ensure that the products and labeling meet GM’s rigorous standards. In addition, manufacturers must use high-quality (Group III or IV) base oils and must pay a licensing fee per gallon. As you may have already figured out, these inputs result in higher retail costs for customers.
If you regularly service or use non-GM vehicles, or GM vehicles no longer under warranty, THRIVE® Full Syn Engine Oils are a great alternative. These products are formulated with advanced additive technology to protect your engines against wear, sludge, and harmful deposits. Every batch meets or exceeds industry standards, including ILSAC GF-7 and API SQ, ensuring best-in-class wear protection, thermal stability, and cleanliness.
Also, because we manufacture these oils in-house and aren’t tied to additional, and more rigorous, dexos standards, we have more flexibility to formulate and re-formulate blends as needed with a variety of high-quality base oils. So if you’re looking for practical options, the THRIVE Full Syn line is something to consider, offering both reliable performance and cost savings over both dexos-certifed products and more well-known brands we distribute.
Regardless of your decision on what oils you purchase or stock, U.S. Lubricants position in the industry remains strong, and our focus remains squarely on supporting you. We are committed to transparent communication, continuous improvement, and ensuring you have access to solutions you need. If you need guidance or have concerns about oil options for your specific vehicles and equipment, our team is always ready to advise and assist.
Maintaining supply through strategic growth
While pricing remains volatile, your access to critical products does not have to be. We take our responsibility to your business seriously, and we are well-positioned to maintain your supply through this crisis.
We have grown over recent years which helped enable us to secure higher contracted volume with base oil and additive suppliers. In addition, our recent acquisition of contract manufacturer Pack Logix has suppliers wanting to partner with us because they’re betting on us to keep growing in the future. That means we are very confident that our pipeline can keep flowing through this crisis, but we are still subject to the market prices just like everyone else.
Navigating the Market Together
We do not take these market shifts lightly, nor do we underestimate what cost increases mean for your bottom line. We are doing everything in our power to move quickly, communicate clearly, and give you as much advance notice as possible so you can plan your operations effectively. Your business needs a reliable partner now more than ever, and we are committed to helping you weather this conflict.
If you have any questions about how these global shifts affect your specific product needs or pricing, please do not hesitate to reach out. Contact your U.S. Lubricants representative today with any questions. And if you don’t currently buy from U.S. Lubricants, but you want to explore what we have to offer, fill out our Contact Us form!
