Full Breakdown
Costco Rationing Motor Oil Amid Global Supply Squeeze
By Drooid · · How we work
Core Event
Costco Wholesale has raised the price of its Kirkland Signature full-synthetic motor oil to roughly $58 for a two-pack of 5-quart bottles and imposed a purchase cap of one transaction per membership with a maximum of two units every seven days. The retailer has applied a similar limit to Mobil 1’s six-pack of 1-quart bottles, restricting members to five units per week.
Background & Context
Motor oil’s base stock, known as Group III base oil, is derived from the same crude-oil barrels that produce gasoline and diesel. Recent disruptions in the Middle East—including drone attacks that damaged Saudi Arabia’s East-West pipeline and attacks on Qatar’s Pearl gas-to-liquids facility—have curtailed the flow of Group III supplies, which historically accounted for about 44 % of U.S. imports. Refiners, facing higher margins on fuel versus lubricant production, have shifted capacity toward gasoline and diesel, tightening the supply of base oil for synthetic lubricants.
Data & Statistics
- Kirkland Signature 5-quart two-pack: $57.99 (up from the mid-$30s a few months earlier).
- Mobil 1 six-pack of 1-quart bottles: $44.
- Purchase limits: two Kirkland units per member per week; five Mobil 1 units per member per week.
- Brent crude traded above $109 per barrel and settled near $105.68; West Texas Intermediate settled near $101.39.
- U.S. regular gasoline averaged $4.31 per gallon, while diesel topped $6.23 per gallon.
Official Statements & Responses
He added that “as you would expect, everything derived from a barrel of oil is being impacted in different ways.”
Andrew Lipow, president of Houston-based consulting firm Lipow Oil Associates, explained that the shortage is concentrated in Group III base oils, which are supplied primarily by Qatar, the United Arab Emirates and South Korea.
Costco has not issued a public comment on the policy change.
Conflicting Reports & Gaps
While Costco’s website details the purchase caps, the retailer has not released an official press statement explaining the duration of the limits. Competing retailers—including Walmart, Amazon and AutoZone—have not confirmed whether they will adopt similar caps or price adjustments, leaving the broader market response uncertain.
Verbatim Quotes
- “The normal car requires four to five quarts every 5,000 miles or so,” — Patrick De Haan, GasBuddy
- “As you would expect, everything derived from a barrel of oil is being impacted in different ways,” — Patrick De Haan, GasBuddy
- “What we do know is that Qatar, UAE, and Korea provide what is known as Group III Base Oils,” — Andrew Lipow, Lipow Oil Associates
- “Disruptions are coming because of a certain war of choice,” — Rob Benson, content creator
- “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” — Donald Trump, U.S. president
What’s Next
The East-West pipeline in Saudi Arabia is expected to remain largely offline for weeks, prolonging the Group III shortage. Industry analysts project that U.S. base-oil markets could stay under pressure into 2027, when new domestic Group III capacity is slated to come online. If supply constraints persist, additional retailers may consider implementing purchase limits similar to Costco’s approach.