Major US Retailer Rations Motor Oil Due To Severe Global Shortage

Key Points:

• Global oil supply is severely impacted by Middle East unrest and the Ukraine conflict, causing fuel prices to rise, with diesel recently surpassing a nationwide average of $6 per gallon.
• Motor oil prices have surged sharply as oil companies prioritize refining crude into gasoline and diesel, leading Costco to ration its Kirkland Signature motor oil to two five-quart jugs per customer per week.
• The price increase is also driven by stricter quality standards and certifications like the American Petroleum Institute and GM’s Dexos, which add licensing fees and production costs passed on to consumers.
• The ongoing supply constraints, exacerbated by the closure of the Strait of Hormuz blocking about 20 million barrels daily, suggest that shortages and rationing measures could persist or worsen in the near future.
• Consumers may face continued challenges in obtaining motor oil and fuel at reasonable prices, with potential for other retailers to adopt similar rationing policies if the situation does not improve.