Engine oil prices rise in Canada and the US after Iran war; crisis may continue until 2027

 

 

Engine oil prices are rising sharply in Canada and the US after the Iran war. The current crisis is due to a shortage of 'Group III base oils', which are essential for the production of synthetic motor oils used in modern engines. Economists estimate that this problem may last until mid-2027.

These oils usually come mainly from the Gulf region. But the disruption of shipping due to the war has put automakers and oil companies in a crisis. Shell's 'Pearl GTL' plant in Qatar, which produced 30,000 barrels of oil per day, was damaged in a rocket attack. It will take at least a year to fully repair it.

The current situation is worrying car manufacturers, as synthetic oils are essential to maintaining the engine efficiency of modern vehicles. Companies have asked many dealers to limit their use of oil. The ‘Group II’ oils used in regular motor oils are also facing shortages. This is because refineries are currently focusing on producing more profitable diesel.

Although US companies such as Chevron and ExxonMobil are trying to increase production, it will take at least until 2027 for new plants to be ready. Until then, the cost of changing the oil in cars will increase, which will be a blow to consumers. The crisis could also affect vehicle production, as lubricants are also needed to roll out new vehicles from factories.