Costco Doubles Motor Oil Prices Amid Supply Shortages
Costco raised the price of its Kirkland Signature motor oil to nearly $58 per two-pack, up from roughly $30 last year. The retailer also limited customer purchases to two boxes per week. Brent crude prices exceeded $109 per barrel on Monday morning.
Costco increased the retail price of its store-brand motor oil by nearly 90 percent. A two-pack of five-quart Kirkland Signature full-synthetic oil now costs approximately $58. Last year, the same product sold for around $30. The warehouse club also restricted customer purchases to two boxes per week.
The retailer applied similar limits to third-party brands. Mobil 1 full-synthetic motor oil six-packs are priced at about $44. Costco capped purchases at five units per membership account. These moves coincide with a sharp rise in global crude oil costs. Brent crude prices surpassed $109 per barrel on Monday morning.
Middle East Conflict Disrupts Supply
Active fighting in the Middle East has disrupted global oil movements. A major Saudi pipeline remains shut for weeks following an attack. This pipeline previously allowed Saudi Arabia to bypass the Strait of Hormuz. Iranian strikes have halted tanker traffic in the Persian Gulf.
Brent crude prices surged from under $72 in early July. The increase reflects skepticism that the United States and Iran will reach a deal. Such an accord would permit commercial tankers to navigate the strait safely. The US imports over 40 percent of its Group III base oils from the region.
Refiners Shift Focus to Fuel
High crude prices create higher profit margins for gasoline and diesel. Refiners prioritize these fuels over motor oil production. Consumer demand for gasoline and diesel is significantly larger than for engine lubricants. Daily volumes for fuel are substantially higher. Refineries are directing operational focus toward fuel output.
This shift reduces the available supply of motor oil. The national average price for regular gasoline reached almost $4.32 per gallon. This is up from $4.08 a month prior and $3.18 a year ago, according to AAA. US diesel prices hit a record high of $6.23 per gallon on Monday.
Retailers Face Pressure
Drivers face higher costs for vehicle maintenance. Elevated grocery bills and inflation concerns compound the financial strain. Competitors like Walmart, Amazon, and AutoZone have not announced similar price hikes. It is unclear if these retailers will impose purchase limits. They did not respond to requests for comment.
Costco did not immediately respond to requests for comment. The market data comes from GN auto markets/energy reports on crude oil prices. The rise in lubricant costs tracks the volatility in the crude oil markets. Retail pump prices for gasoline and diesel consistently follow these fluctuations.
