Ferrari SF90 XX Spider limited edition plug in hybrid supercar parked on the pavement as a red Ferrari passes on Bond Street on 4th January 2026 in London, United Kingdom.
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A global base oils shortage is starting to filter through to drivers of luxury cars, with analysts and industry groups warning that stocks could soon run dry if the Iran war drags on.
Ongoing disruption through the strategically vital Strait of Hormuz has triggered what the International Energy Agency has described as “the biggest energy security threat in history,” although the supply shock stretches far beyond crude oil, fertilizer and helium.
Base oils are the primary component used to produce high-performance lubricants for engine oils and industrial fluids.
Group III and Group IV base oils, such as polyalphaolefins (PAO), are key feedstocks for synthetic finished lubricants used for automotive purposes, with PAO particularly important for luxury vehicles.
Stocks are going to run dry in a month if nothing comes in and that will just cut finished lubricant production.
Gabriella Twining
head of base oils pricing at Argus Media
The Gulf region accounts for as much as 20% of global Group III base oils capacity and accounts for 72% and 47% of Group III imports by Europe and the U.S., respectively, last year, according to Argus Media.
Supercars, which are especially prevalent in major cities such as London, Monte Carlo and Los Angeles, rely on these niche products because they can withstand extreme heat, high revolutions per minute (RPMs) and intense pressure.
“The clue is in the name, as in, they are essentially the base for all finished lubricants for automotive, industrial, aviation, marine … you name it, if something moves, it will need a lubricant and that’s made from a base oil,” Gabriella Twining, head of base oils pricing at Argus Media, told CNBC in a phone interview.
Engine oil for sale near cigarettes packs at a stand at the Bara taxi station in Soweto near Johannesburg, South Africa, on Wednesday, Feb. 18, 2026.
Bloomberg | Bloomberg | Getty Images
In recent weeks, Argus-assessed base oil prices have soared to record highs, with Group III base oil prices in northern Europe climbing nearly 100% since the outset of the Iran war.
It comes amid prolonged disruption to shipping traffic through the Strait of Hormuz, damage to Shell’s Pearl Gas-To-Liquid facility in Qatar from Iranian missile strikes and declarations of “force majeure” by producers in Bahrain and the United Arab Emirates.
South Korea, a global leader in base oil production and a major exporter of Group III base oils, recently introduced mandatory export caps on refined petroleum products, seeking to shore up domestic base oils supply amid the crisis.
“These historic price rises have to be paid by somebody and that is going to be passed on to the finished lubricant and the buyer of the finished lubricant,” Twining said.
“Stocks are going to run dry in a month if nothing comes in and that will just cut finished lubricant production. You can push back an oil change but it’s just going to be more expensive and there will be less availability,” she added.
Rico Luman, a senior sector economist with a focus on transport and logistics at ING, said the current oil market squeeze and the heavy Asia and Middle East base oils footprint would “definitely” lead to a supply crunch.
There are stocks of these “relatively low turnover products down the supply chain, but delivery times could definitely run up, endangering replenishment. And, of course, prices will also see the effect of Asian dependency next to general oil price increases,” Luman told CNBC by email.
‘Productive and sobering’
The Independent Lubricant Manufacturers Association (ILMA) described a recent meeting with U.S. lawmakers on the severity of base oil supply disruptions as “both productive and sobering, with all parties acknowledging the severity of the situation and the lack of clear near-term solutions.”
The group, which noted approximately 44% of U.S. base oil supply typically stems from the Persian Gulf, said on April 8 that market impacts were already emerging, with disruptions rippling across multiple sectors.
ILMA, which represents independent lubricant manufacturers, also said it expects the U.S. base oil market to remain under sustained pressure until at least 2027, with members bracing for soaring costs throughout the supply chain.
ILMA CEO Holly Alfano said the lubricant industry is currently grappling with three compounding pressures, noting that roughly 40% of the global Group III supply from the Persian Gulf were offline or unable to ship, South Korean refiners were constrained by a crude shortage, and refiners were diverting Group II feedstock over to fuels.
“Altogether, these dynamics are placing nearly three-quarters of U.S. Group III imports under stress, while also eliminating the industry’s ability to substitute with Group II base oils,” Alfano told CNBC by email.
“Compounding the risk, we are entering hurricane season—even a single storm impacting the Gulf Coast could take out 30–40% of U.S. Group II capacity and an additional 10% of Group III, further tightening an already strained supply chain,” she added.
