Costco raises prices for Kirkland Signature motor oil and restricts purchases, tensions in the Middle East push up oil prices
Quick Look
- Costco has raised the price of Kirkland Signature fully synthetic motor oil in 5-quart, 2-pack bottles from about $30 to about $58, and has limited purchases to 2 boxes per week.
- It also limits the purchase of Mobil 1 fully synthetic motor oil in 1-quart, 6-pack bottles, with a maximum of 5 sets per member.
- Tensions in the Middle East have led to rising oil prices.
AI-generated summary
Why It Matters
Continued tensions in the Middle East have led to rising oil prices, affecting the production costs of synthetic motor oils, which mainly rely on Group 3 base oils, most of which are imported from the Middle East.
As oil prices continue to rise due to ongoing tensions in the Middle East, oil companies can make higher profits refining crude oil into diesel or gasoline than producing motor oil. (AP)
[Financial Channel/Comprehensive Report] Costco has raised the price of its own brand of Kirkland Signature fully synthetic motor oil in the United States, while also limiting the amount customers can buy each week, as oil prices rise again. For Americans hoping to save some money by buying motor oil and changing their own oil, this may be another blow to their wallets, as they are already dealing with high grocery prices and concerns about inflation.
The Associated Press reported that Costco's Kirkland Signature fully synthetic motor oil is currently priced at about US$58 (approximately NT$1,847) in a 5-quart (approximately 4.73 liters) bottle of 2, which is much higher than last year's price of about US$30 (approximately NT$955). Costco also only allows customers to purchase 2 boxes per week.
Please read on...
Costco also limits the purchase of 1 quart (approximately 946 ml) 6-packs of Mobil 1 fully synthetic motor oil. This product sells for about US$44 (approximately NT$1,401), and each member can only purchase a maximum of 5 sets.
Costco did not immediately respond to a request for comment.
Today's synthetic motor oils rely heavily on Group III base oils, which are mostly made by refining crude oil. It is estimated that the United States imports more than 40% of such base oils from the Middle East, which has been affected by oil supply disruptions since the outbreak of the war with Iran earlier this year.
As oil prices continue to rise due to ongoing tensions in the Middle East, oil companies can make higher profits refining crude oil into diesel or gasoline than producing motor oil. Moreover, the global demand for diesel and gasoline is much higher than the demand for engine oil, and the daily demand is very large. Therefore, oil companies are likely to invest more resources into diesel and gasoline and reduce the production of engine oil.
It remains to be seen whether other motor oil retailers such as Walmart, Amazon and AutoZone will also increase prices or limit purchase quantities. Walmart, Amazon and AutoZone did not immediately respond to requests for comment.
Grasp the economic pulse with one hand. Click here to subscribe to Free Finance Youtube Channel
What to Watch
AI outlook — possibilities, not facts
If tensions in the Middle East continue, engine oil prices may rise further, and retailers may continue or expand purchase restrictions.
Likely · Within weeks
Open Questions
- Will Walmart, Amazon and AutoZone follow suit by raising motor oil prices or implementing purchase restrictions?
- If the situation in the Middle East worsens further, what will be the long-term impact on engine oil supply?
- Will oil companies permanently reduce engine oil production capacity in favor of higher-margin diesel and gasoline?
