April lubricants industry market update.

[Foxtrot08]

I thought I heard that the supply of PAO (and esters) was also going to be an issue in the near future too?

PAOs are always in tight supply. That being said, last year Ineos put some additional PAO online. It’s still expensive, but if group 3s continue to climb, it may be worth while to look at PAO formulations.

However, we will see if the market fractures that far.

That being said, reformulation costs… getting proper supply chains, approvals, etc. are all costly and time consuming as well.

 

[TwoC400s]

It was my understanding that while PAO (and esters) supplies aren't being directly impacted by the Hormuz closure, there just simply wasn't enough current PAO/ester production and inventory to handle the volumes required for reformulation efforts away from GpIII.

 

[Foxtrot08]

It was my understanding that while PAO (and esters) supplies aren't being directly impacted by the Hormuz closure, there just simply wasn't enough current PAO/ester production and inventory to handle the volumes required for reformulation efforts away from GpIII.

Yep. There’s just not enough to replace the volume of group 3s used today.

We make a lot of PAO (and esters) in the U.S. and also in Europe. But… just not enough.

Now, you may see some of the more “boutique” weights go to a PAO formulation. Your 0w40, 0w30’s.

But your full synthetic 5w30 / 0w20 even 0w16 that is… a lot of volume. There’s not enough excess… that’s assuming, it’s not all sold out for the year anyways.

 

[colloyd00]

Here’s some reporting on this topic:

https://www.cnbc.com/2026/05/01/strait-of-hormuz-base-oils-luxury-autos.html

 

[tired]

Here’s some reporting on this topic:

https://www.cnbc.com/2026/05/01/strait-of-hormuz-base-oils-luxury-autos.html

LOL "drivers of luxury cars" and also "drivers of beaters who frequent the oil forum BITOG"

 

[4wd]

Here’s some reporting on this topic:

https://www.cnbc.com/2026/05/01/strait-of-hormuz-base-oils-luxury-autos.html

Gonna need a mini violin for that problem …

 

[mitsuman47]

Here’s some reporting on this topic:

https://www.cnbc.com/2026/05/01/strait-of-hormuz-base-oils-luxury-autos.html

While it isn’t necessarily incorrect, I’m guessing this is either AI slop or the most poorly proofed article ever.

Check out that 2nd bullet point.

“Supercars engines rely on base oils because they can withstand extreme heat, high revs and intense pressure.”

 

[colloyd00]

LOL "drivers of luxury cars" and also "drivers of beaters who frequent the oil forum BITOG"

We might not have Supercars but we have super cars!

 

[The_Jeff]

While it isn’t necessarily incorrect, I’m guessing this is either AI slop or the most poorly proofed article ever.

Check out that 2nd bullet point.

“Supercars engines rely on base oils because they can withstand extreme heat, high revs and intense pressure.”

This could just be whiz-poor reporting. If you know anything about anything, what gets printed in the media will be a poor representation of the truth.

I've read BITOG for 24 years now and it's only been the last week where I've seen "group III oil" in mass media. (But multiple times!) These events are remarkable and will be part of BITOG history.

 

[SC Maintenance]

Since this thread was posted I have pondered how we are most likely to deal with the shortage that undoubtedly will exist at some level.

On the conservative side, 35-40% of premium group 3 base oils that are imported into the United States, are offline or stranded. On the high side, with refinery cut backs in Korea, Europe and Japan, this number could be substantially higher, but the analytics are not in yet.

So assuming we will be short in the 40% range, how much will the price have to go up to create enough demand destruction to compensate for that, and from where will it come?

Is it safe to assume that the suppliers will fill commercial orders first at the expense of the DIY market? Or will it be opposite - walmart will be stocked but bulk may not have supply?

Will commercial users simple extend drain intervals or forgo maintenance over cost first, or will it be the consumer market. Are they even the same market, given most commercial stuff is diesel?

Will the whole world simply go on allocation in some manner. So price will have little to do with it?

Can anyone think of anything similar - besides the toilet paper fiasco in 2020 which I don't think is a very good example. I can think of industrial examples in the pandemic, but they weren't consumables so not really the same either.

 

[Foxtrot08]

Since this thread was posted I have pondered how we are most likely to deal with the shortage that undoubtedly will exist at some level.



So assuming we will be short in the 40% range, how much will the price have to go up to create enough demand destruction to compensate for that, and from where will it come?

Is it safe to assume that the suppliers will fill commercial orders first at the expense of the DIY market? Or will it be opposite - walmart will be stocked but bulk may not have supply?

Will commercial users simple extend drain intervals or forgo maintenance over cost first, or will it be the consumer market. Are they even the same market, given most commercial stuff is diesel?

Will the whole world simply go on allocation in some manner. So price will have little to do with it?

Can anyone think of anything similar - besides the toilet paper fiasco in 2020 which I don't think is a very good example.

So the first thing to go is industrial applications for raw Group 3 base oils. Where they use it for process oils, plasticizers, that sort of thing.

When they had excess to dump, that’s there they dumped it. And yes, before this - there was excess to dump into process oils.

The second thing to go, will be your odd ball, low volume chemicals. They use group 3s in fuel additives, top treatments, etc. these are all small quantity purchased, spot buys. Generally, you don’t need group 3s in these anyways. And it’s done for marketing purposes anyways.

Third thing to go, your smaller blenders who buy on the spot market only. I’m not going to name any names. But this is happening right now, actively. I can say companies that purchase from these smaller blenders, have reached out to me for product.

After that, it gets very cloudy… however I feel the answer will come soon. I personally feel like the DIY market will be next in line to start feeling cuts, as oil companies pull back from non-contracted gallons.

The fifth will be heavy distributor allocations. Remember, our contracts *do* have a minimum yearly purchase. I have to buy X amount of gallons of Chevron / Citgo / P66 / Fuchs / Idemitisu / etc. to keep my distributor contract, or, the level of contract I have. Now, they’ll work with me on this shortage. But for a hypothetical number. If I don’t buy 500,000 gallons of Chevron. They could change my distributor contract.

The last cut will be contracted gallons. OEM gallons - GM, Ford, Toyota, Honda, large direct industrial volume bids, etc.

 

[Foxtrot08]

As for pricing vs demand destruction.

That, is a question that we are all grappling with currently. There’s not a good answer of when consumers will stop buying… or at least, I don’t have one.

I’ve been struggling for the rest of this post. But it mostly devolves into my opinion. Which, is the exact opposite of what this post is supposed to be. Facts vs opinions.

Even the above post, the facts stop at point 3. As we have hit that point factually. That’s why I said gray area.

The facts are, no one knows where demand destruction is going to set in right now, due to pricing. We are truly in uncharted territory.

 

[The_Jeff]

Since 90% of oil changes are DIFM I suspect the quick lubes will substitute junky oils. Eg a blend 5w20 instead of full syn 0w16 or 0w20. They may or may not solicit the customer's permission. They'll probably say "our entry level bulk oil is fine" and the customer will go for it if they see the price of the full synthetic change. There'll probably be a few instances where an alert Hank-Hill type gets his receipt, sees the wrong weight on it, questions it, and the service writer just mumbles "that's what we use now."

I serviced a LOT of corollas and civics that took 5w20 with bulk 5w30. $17 coupon special OC, 2011, chain tire store. Owners treated the cars like appliances and service like a commodity. Oddly never worked on a Prius back then; owners must have though they were exotic and needed dealer-only service.

What the dealers will do WRT substitutions is a more interesting question for me.

Also wonder what habits will be changed, like from obeying the 5k window sticker to obeying an OLM. Once changed, they'll probably be changed permanently. My experience with people is that some are car people and care, many are not and don't. Few are on the fence so IMO few will "flip."

 

[OM617YOTA]

Since 90% of oil changes are DIFM I suspect the quick lubes will substitute junky oils. Eg a blend 5w20 instead of full syn 0w16 or 0w20.

Suspect this is already standard operating procedure.

 

[chazthespaz]

I already had a few jugs stashed from various sales and rebates, but added four more from Costco for $54 as a "hedge."

 

[scip5.3L]

I already had a few jugs stashed from various sales and rebates, but added four more from Costco for $54 as a "hedge."

Same, Costco oil isn't necessarily my first choice BUT with what is potentially coming and the insanely low price of this oil along with Costco's generous return policy I am overstocking my DIY inventory incase we hit the emergency break glass situation.

 

[chazthespaz]

Same, Costco oil isn't necessarily my first choice BUT with what is potentially coming and the insanely low price of this oil along with Costco's generous return policy I am overstocking my DIY inventory incase we hit the emergency break glass situation.

Even if the fit doesn't hit the shan, $13.50 per jug was an offer I couldn't refuse.

 

[paulri]

Exactly. If oil prices are sane when I run through my current stash, I'll go back to whatever oil I wanted to use, and return my 4-pack of 5-qt jugs and get my $50 back. But if they are still in the upper stratosphere, I'll take those $13.50 oil changes with synthetic High Mileage oil and be good with it.

Same, Costco oil isn't necessarily my first choice BUT with what is potentially coming and the insanely low price of this oil along with Costco's generous return policy I am overstocking my DIY inventory incase we hit the emergency break glass situation.

 

[OM617YOTA]

@Foxtrot08

Any insights about how this whole mess is going to change fuel formulations?

Suspect my preferred station has started switching to renewable diesel, which they've run in the past when fuel prices were high. Didn't pay attention to what was on the pump, but did notice it foamed a whole lot less than normal, and my EGTs are a bit higher than normal.

Edit: I can start another thread if preferred, this question is off-topic for this thread.

 

[Foxtrot08]

@Foxtrot08

Any insights about how this whole mess is going to change fuel formulations?

Suspect my preferred station has started switching to renewable diesel, which they've run in the past when fuel prices were high. Didn't pay attention to what was on the pump, but did notice it foamed a whole lot less than normal, and my EGTs are a bit higher than normal.

Edit: I can start another thread if preferred, this question is off-topic for this thread.

HVO / H99 / RDO / R99 has generally been discontinued. There’s a little bit of it being made out in CA for their standards right now. But I’ve generally given up on trying to get any across the Midwest where we sell fuel. I get asked for some drums of it about once a month and now, I don’t even bother to get pricing on it.

Fuel *in general* should be fine in the U.S. although, I say that, and everything is currently screwed up.

BP Whiting, Marathon Robinson and P66 wood River are all down or were, recently down. Which is why the Midwest is currently under a fuel shortage, as it’s about 1m BPD offline, give or take.

I don’t know where you’re particularly from. But from a refinery friend of mine, they are tightening somethings down on the refinery end to make more jet fuel. You may be seeing basically more of Kerosene type product at the pump. But I doubt it’s R99/H99 unless you’re in SoCal.