Automakers including Stellantis and Volkswagen are pivoting to new lubricant blends as the conflict with Iran exacerbates a severe shortage of engine oil supplies. The disruption traces back to March, when an attack on Shell's gas-to-liquids facility in Qatar severely curtailed the supply chain for high-grade Group III base oils, a critical component in motor oil production.

Prices for Group III base oils in Europe and the United States have skyrocketed nearly threefold from pre-conflict levels, reaching approximately $4,000 per metric ton. With inventories of premium base stocks depleted, automakers have sought out alternative lubricant suppliers, but even these sources are stretched perilously thin.

"Supply from other vendors is also limited. Any further shipping disruption, refinery outage, or other supply shock could rapidly deteriorate the situation," warned Holly Alfano, CEO of the Independent Lubricant Manufacturers Association. "The industry is operating with almost no margin for error."

Gabriella Twining, global head of base oils pricing at Argus Media, noted that some Middle Eastern Group III suppliers to Europe and the U.S. have declared force majeure after selling out their inventories. "Even if the Strait of Hormuz were to reopen tomorrow, we don't expect replenishment shipments to reach Europe and the U.S. before October at the earliest," Twining cautioned.

Stellantis told media that it has evaluated "reformulated lubricants" and identified alternative products that meet industry standards, adding that its focus remains on "minimizing any impact on vehicle maintenance and repair activities." Meanwhile, Volkswagen said it has secured current supplies and is assessing other procurement options that align with its "technical specifications and quality requirements."

Toyota Motor has also secured alternative supply sources, while Suzuki Motor's CEO, Toshihiro Suzuki, informed shareholders that the company is actively pushing its base oil suppliers to diversify their sourcing. In May, Nissan Motor notified its dealers that "production capacity for most lubricant products has been reduced," prompting the company to restrict supply of its high-grade engine oils and pursue alternative procurement channels.