Costco Raises Motor Oil Price to $58 and Limits Purchases
Costco has sharply increased the price of its popular Kirkland Signature motor oil and introduced a weekly purchase limit as rising oil prices and supply disruptions put pressure on the market for lubricants.
The wholesale retailer’s 10-quart case of Kirkland Signature full-synthetic motor oil now sells for about $58, up from roughly $30 to $35 for much of the past several years.
Costco has also limited customers to two cases per week, according to the product listing on its website.
The development is another sign that the effects of the current disruption in global oil supplies are spreading beyond petrol and diesel to products made from petroleum-based materials.
Why did Costco raise the motor oil price?
The increase is linked to higher crude oil prices and tighter supplies of the materials used to manufacture synthetic motor oil.
Modern synthetic motor oils rely heavily on Group III base oils, which are produced through the refining of crude oil. A significant portion of the Group III base oils used in the United States comes from producers in the Persian Gulf.
Supply disruptions in the region have therefore created additional pressure on the availability and cost of the material used to produce motor oil.
The price increase at Costco comes as crude oil prices have climbed sharply amid continuing disruptions to global oil shipments.
Brent crude rose above $109 per barrel on September 14, compared with less than $72 in early July, according to Fox Business.
The situation has also affected fuel prices in the United States. The national average price of regular gasoline reached nearly $4.32 per gallon, while diesel climbed to about $6.23 per gallon, according to AAA data cited by Fox Business.
Costco puts a limit on motor oil purchases
The price increase is not the only change affecting Costco shoppers.
The retailer is limiting purchases of Kirkland Signature full-synthetic motor oil to two 10-quart cases per customer per week.
Costco has also introduced restrictions on another popular motor oil brand sold through its warehouses.
Customers buying Mobil 1 full-synthetic motor oil’s one-quart six-pack, which costs about $44, are limited to five packs per membership.
The restrictions suggest that Costco is taking steps to manage available inventory as supply becomes more difficult and expensive to secure.
Costco had not publicly provided a detailed explanation for the purchase limits when Fox Business published its report, although the restrictions come amid the broader disruption in oil and lubricant supplies.
How does crude oil affect motor oil?
Although motorists generally associate crude oil with petrol and diesel, crude oil is also an important starting point for producing lubricants.
Refineries process crude into different petroleum products and feedstocks. Some of these materials are further refined to produce the base oils used in lubricants.
For synthetic motor oil, Group III base oils are particularly important.
This means a disruption affecting crude oil production, refining or transportation can eventually affect the supply and price of products used to lubricate vehicle engines.
The current situation is especially significant because a substantial share of the Group III base oils used in the US comes from the Persian Gulf.
When supplies from the region are disrupted, manufacturers and retailers can face higher costs and tighter availability.
Why is the Middle East affecting motor oil prices?
The wider disruption is connected to the ongoing conflict in the Middle East and uncertainty surrounding oil shipments through the Strait of Hormuz, one of the world’s most important energy shipping routes.
Concerns about the movement of oil and petroleum products through the region have pushed crude prices higher.
That increase does not necessarily mean the price of every petroleum-based product will immediately rise by the same amount. However, higher crude prices can increase costs throughout the production and transportation chain.
The pressure is already visible in fuel markets.
According to figures cited by Fox Business, US regular gasoline averaged nearly $4.32 per gallon on September 14, compared with $4.08 a month earlier and $3.18 a year earlier.
Diesel reached an average of $6.23 per gallon, up from $5.90 a week earlier.
What does the Costco price increase mean for motorists?
For motorists who normally buy their own oil and perform oil changes themselves, the change means maintenance costs could rise.
A Kirkland Signature 10-quart case that previously cost around $30 to $35 is now about $58. That represents an increase of roughly 66% to 93%, depending on the earlier price used for comparison.
The purchase limit also means customers cannot simply buy larger quantities to protect themselves against further increases or shortages.
However, Costco is not necessarily the only retailer facing pressure.
The current disruption could affect other suppliers if higher crude prices and shortages of base oils persist. Fox Business reported that it remained unclear whether major retailers such as Walmart, Amazon and AutoZone would introduce similar price increases or purchase restrictions.
Is motor oil becoming the next oil-market problem?
The Costco development highlights how disruptions in the global energy market can spread into products that consumers may not immediately associate with crude oil prices.
The initial concern during an oil-supply disruption is usually the cost of petrol, diesel and heating fuels.
But motor oil is also tied to the petroleum supply chain.
If supplies of the base oils required for synthetic lubricants remain tight, manufacturers and retailers could face higher costs, potentially leading to further increases for motorists.
For now, Costco’s decision to raise the price of Kirkland Signature motor oil and restrict purchases provides an early indication that the current energy-market disruption is affecting more than what motorists pay at the fuel pump.
Frequently asked questions
How much is Costco’s Kirkland motor oil now?
A 10-quart case of Kirkland Signature full-synthetic motor oil now costs about $58, compared with roughly $30 to $35 previously.
How much Kirkland motor oil can Costco customers buy?
Customers are currently limited to two cases per week.
Why is motor oil becoming more expensive?
Higher crude oil prices and disruptions affecting supplies of Group III base oils used in synthetic motor oil are putting upward pressure on prices.
Is Costco limiting other motor oil brands?
Yes. Costco has also limited purchases of Mobil 1 full-synthetic motor oil’s one-quart six-pack to five per membership.
Does crude oil affect motor oil?
Yes. Motor oil relies on base oils derived from petroleum feedstocks. Disruptions in crude oil production, refining or transportation can therefore affect lubricant supplies and prices.
Will other retailers increase motor oil prices?
It is not yet clear. Major retailers including Walmart, Amazon and AutoZone had not indicated whether they would follow Costco with similar price increases or purchase restrictions at the time of the report.