War-Driven Oil Supply Disruption Forces Automakers to Change Engine Lubricants

Stellantis ($STLA) and Volkswagen ($VLKAF) have confirmed they are using alternative lubricant blends after disruptions to Group III base oil supplies, according to the Financial Times. Toyota and Nissan have reportedly made similar sourcing changes.
The disruption traces back to a March Iranian strike on Shell’s Pearl gas-to-liquids plant in Qatar, a major source of Group III base oil used in full synthetic motor oils. About 44% of the Group III base oil normally used in the U.S. comes from three Persian Gulf refineries.
Group III prices have nearly tripled from pre-war levels to roughly $4,000 per ton in Europe and the U.S., while retail motor oil prices have risen about 35% industrywide. Industry groups do not expect the market to normalize before mid-2027, even under a best-case scenario.
Automakers say the replacement lubricants meet required technical standards, but the formulations are not necessarily identical to those previously specified. Drivers are advised to confirm the correct oil specification for their vehicle and expect higher maintenance costs.