Iran War Is Driving Up the Cost of Your Next Oil Change -- WSJ

By Christopher Otts and Sarah Nassauer

Detroit repair-shop owner Ali Alhumaidi noticed a new habit from his customers in recent weeks: They have started bringing in their own motor oil when they need oil changes.

"You tell the customer, with labor, it's around $100. That's a lot for an oil change," Alhumaidi said. Customers are often carrying in bottles of motor oil from Walmart, so Alhumaidi only charges them about $20 to $50 for labor costs.

The money-saving hack will probably not work much longer. The Iran conflict hasn't only sent diesel to recent highs and gas to $4.49 a gallon on average, but also driven up the price of motor oil so much that retailers like Walmart and Costco are now taking action-and service shops might pass on their extra costs to the customer.

To account for oil inflation, Walmart raised prices slightly for much of its motor-oil selection earlier this summer, a company spokeswoman said. It then raised the price of its oil-change services at stores by a few dollars each in August, she said.

For its part, Costco recently raised the price of its private-label Kirkland motor oils to $58 for 10 quarts. That is an increase from $36 on May 30, according to Mizuho Securities, which tracked prices at one of the warehouse membership club's stores in New Jersey.

Costco is also limiting the amount of motor oil any individual customer can buy online, a restriction that analysts expect will prevent sales to small, independent auto-service businesses, which won't be able to pass along the savings to customers.

"We have seen inflation on motor oil, similar to all oil-related products, due to the conflict in the Middle East," said Costco Chief Financial Officer Gary Millerchip.

Walmart works with its suppliers "to manage costs and keep products available at the low prices our customers expect," a company spokeswoman said.

Higher oil costs-and tighter supplies-triggered by the Iran conflict are now cascading through the automobile-service industry. Stellantis, parent of the Jeep and Ram brands, recently switched its bulk oil supply for dealer service departments from 0W-20 to 5W-20 for some of its V-6 and V-8 engines.

The latter is less optimal for cold weather conditions. The change also means that drivers will have to get the next service sooner-at 7,500 miles instead of 10,000, the company said. Yet Stellantis said it wants to ensure supply for its vehicle owners, calling the move "a temporary measure in response to current global conditions."

Meanwhile, Valvoline Inc., the quick-lube retailer, has seen its synthetic-motor-oil costs rise sharply since March, which amounts to about $5 to $7 more per oil change, executives said this month.

Valvoline has raised prices accordingly at its company-owned stores and passed cost increases through to independent franchisees who run other stores, they said.

A spokeswoman for the Lexington, Ky., company said that Valvoline has adequate motor-oil supply for the foreseeable future, and that the entire industry is affected by the cost increases. Valvoline Inc. is distinct from Valvoline Global Operations, the motor-oil manufacturer owned by Aramco, the Saudi Arabian oil company.

"Our focus remains on serving customers while managing this cost environment responsibly," the spokeswoman said.

The supply of synthetic oils has been tightening since March, when several specialized refineries in the Persian Gulf were disrupted at the start of the Iran conflict. A Shell refinery in Qatar that was damaged is a major source of base oils for products that end up in the U.S., said Nate Chenenko, an automotive aftermarket specialist at consulting firm Ducker Carlisle.

The refinery won't be fully back in production until 2027, Shell has said.

At issue is the supply of Group III base oils, which are the main ingredients in synthetic lubricants like motor oil. Full synthetic and low-viscosity grade oils like 0W-20, 0W-16, 0W-8 are the most affected by reduced refining capacity in the Persian Gulf, according to the Independent Lubricant Manufacturers Association, a U.S. trade group.

The shortage is compounded by the high cost of diesel fuel, the group said. Normally, Group II base oils could substitute for Group III, but those also are in short supply because refiners are giving priority to feedstocks for fuel rather than for base oils.

U.S. refineries generally aren't set up to manufacture Group III base oils, Chenenko said. The other significant production hub for these oils is South Korea, and refineries there have had trouble getting enough feedstock to fill the gap, he said.

Mark Panetta, the service manager at Jefferson Chevrolet in Detroit, said the dealership has footed the bill for higher oil costs lately.

But he has held off on raising the prices of an oil change, he said. Many of his local customers are struggling financially, he said, and are now especially squeezed by higher gas prices. "It's gonna hurt me or it's gonna hurt them, right?" he said of his customers. "I'd rather hurt me for right now."

Panetta added that the cost of transmission fluid is especially "off the charts," however, about $50 higher than it used to be.

"I'm, like, if you've got a coupon, now's the time to use it," he said.

Write to Christopher Otts at christopher.otts@wsj.com and Sarah Nassauer at Sarah.Nassauer@wsj.com

(END) Dow Jones Newswires

September 25, 2026 15:43 ET (19:43 GMT)