In response to the continued tension in the Middle East and the global disruption in oil supply, American retail giant Costco has raised the price of its popular in-house brand Kirkland Signature motor oil and implemented purchase restrictions on multiple oil products.
Costco’s official website shows that the price of a 10-quart pack of Kirkland Signature full synthetic motor oil has surged from over 30 dollars in the past few years to 58 dollars, nearly doubling in price. The product page also clearly states in bold that each customer is limited to purchasing two packs per week.
Furthermore, the sale of branded motor oil within the store has also been affected, with a 6-bottle pack of Mobil 1 full synthetic motor oil priced at around 44 dollars, with each member account limited to purchasing five sets.
The significant fluctuations in synthetic motor oil prices reflect the serious challenges facing the global oil supply chain. Modern synthetic motor oils heavily rely on “Group III base oils” refined from crude oil, with over 40% of raw materials in the United States needing to be imported from the Persian Gulf region.
Due to ongoing disruptions in shipping around the Strait of Hormuz, raw material imports have been severely hindered. Meanwhile, international crude oil prices have risen, with Brent Crude surpassing $109 per barrel, driving up prices of regular gasoline and diesel in the United States. With a massive demand for fuel, major refineries have prioritized using crude oil production capacity for gasoline and diesel, further squeezing the production quotas for motor oil.
Costco, founded in 1983, is well-known globally for its membership-based warehouse retail model. Its in-house brand Kirkland Signature, launched in 1995, has been known for offering high value for money, covering various areas from food and household items to automotive parts. Over the years, Costco has used its strong bargaining power and extremely low profit margins to establish Kirkland products as a “inflation-proof fortress” for consumers, such as the hot dog combo and affordable motor oil that have not raised prices for years.
However, for many car owners who are used to changing oil themselves to save costs, against the backdrop of high daily grocery and living expenses, the significant price increase and purchase restrictions on this popular automotive maintenance product undoubtedly add to the burden on household budgets. Whether other major retailers like Walmart, Amazon, and AutoZone will follow suit in raising prices or setting purchase restrictions remains to be seen as the market continues to be observed.