Reports have claimed that Costco has been forced to raise the price on its Kirkland Signature oil blends and will even be rationing how much customers can purchase within a given timeframe. This has led to subsequent concerns that other major retailers may soon do the same.
We recently discussed how escalating warfare in the Middle East and Ukraine have helped drive up the per-barrel cost of oil and thereby fuel prices. But we’re now getting reports of large retailers claiming that they would need to ration motor oil to respond to shortages.
As with the fuel prices, we would assume this is a combination of legitimate supply constraints combined with businesses realizing that global conflict makes for an excellent excuse for ludicrous prices. However, according to The Auto Wire, Costco has begun rationing its Kirkland Signature motor oil due entirely to shortages of key ingredients used in Group 3 based synthetic blends. The outlet has asserted that the business is exclusively concerned with maintaining sufficient inventories.
The company has stated that it will be limiting customers to buying a maximum of two units per week. This seems to apply specifically to the large 5-quart containers, which shouldn’t really pose a serious issue for the typical consumer unless they’re driving well over 10 times the U.S. national average each week. However, pricing has also risen quite a bit — specifically on full-synthetic blends with viscosities rated at 5w-20 or less.
Costco has seen prices for its 10-quart bundles roughly double this year on some of the thinner motor oils. While we’ve likewise seen pricing come up for other retailers, the change has been more gradual and arguably less sudden. Despite the retailer now listing some of its Kirkland Signature oils at nearly $30 per 5-quart jug, one can still find comparable blends elsewhere for significantly less money. If anything, it appears that Costco’s in-house brand has simply lost its ability to market itself offering a major value advantage over alternatives.
That said, there’s been speculation that other retailers may follow suit. For example, Newsweek suggested that Walmart could be next to raise prices on and establish purchasing limits. But we’ve seen nothing official on the matter.
It also needs to be noted that many of the oil blends seeing the highest bumps in price this year (across all retailers) have been of the ultra-low viscosity variety. These are oils largely used by manufacturers to achieve emissions compliance on specific markets, meaning their global production volumes are far lower than something like a traditional (nonsynthetic) 5w-30.
This alone may help explain why retailers might need to ration specific blends. If production is being limited by global conflicts, it makes sense for the industry to prioritize oils that are more widely used.
This may encourage some drivers to pivot toward heavier oils in a bid to save money. Studies have shown that there aren’t many practical downsides to moving to a slightly higher viscosity. But it ultimately depends on the individual vehicle and the tolerances established by the manufacturer. We’d recommend doing plenty of research before you venture outside the boundaries of whatever has been specified by the OEM. There’s always a chance you could do more harm than good to your wallet by mucking up your engine.
We’d suggest being especially cautious if you happen to own a modern turbocharged engine featuring direct injection, as that’s allegedly a big part of the problem.
From The Auto Wire:
The more useful explanation is sitting in plain sight on the box itself. Costco’s Kirkland-branded 5W-30 carries the dexos1 Gen 3 mark, General Motors’ current and tightened proprietary oil specification, visible right on the case. Oils don’t get to wear that badge for free. They have to be independently tested against GM’s protocol and formally licensed by the automaker, formulation by formulation, before a marketer can print it on a bottle.
That licensing burden sits on top of an industry-wide one. Since 2020, the American Petroleum Institute’s current gasoline engine oil category, API SP, and the ILSAC GF-6 standards that came with it have required oils to pass seven new laboratory tests that didn’t exist in the prior generation, including one built specifically to guard against low-speed preignition, a knock-like detonation that shows up almost exclusively in modern turbocharged, direct-injection engines. Automakers spent the last decade chasing fuel economy by shrinking engines and bolting on turbochargers. The oil industry’s answer was a chemically more complicated product built to keep those smaller, harder-working engines from eating themselves. None of that complexity is optional anymore, and none of it is free.
By adding stricter guidelines for what constitutes acceptable full-synthetic oil in the Western world, mandating stringent fuel economy standards, and making newer motors persnickety in terms of blends they’ll tolerate, it has gotten significantly more difficult for oil producers to remain compliant with regulations. Combined with supply issues stemming from production and shipping being compromised by regional warfare, this has created a pickle that's roughly the size of a city bus.
Oil companies are likewise earning a fortune on gasoline right now, so there’s little reason for them to use additional manufacturing capability to produce what amounts to specialty oil blends.
Due to spiking crude prices, shipping complications, and refineries shifting their priorities, the average cost of motor oil had increased by anywhere from 25 percent to 70 percent this year. As previously noted, ultra-low viscosity synthetic blends tended to see the worst of it. But specialty high-viscosity oils featuring a lot of additives don’t appear to have it that much better.
Still, there’s no reason to overpay if you’re willing to browse. Despite most of the reporting indicating that these price increases are the unavoidable consequence of geopolitical decisions, it’s not impossible to find identical jugs of oil on sale for wildly different prices. I can personally attest to seeing prices of the exact same brand of oil (five quarts of 5w-30, full-synthetic) varying by up to $20 per bottle, both online and in stores.
All you need to do is be willing to shop around. Assuming you’re likewise comfortable with straying from your preferred oil brand, then there are even more savings to be had. However, we’d still recommend sticking with something specified for your vehicle and adhering to a rigid maintenance schedule. Swapping any fluids a little prematurely can only extend the life of your vehicle, ultimately saving thousands of dollars more than attempting to be cheap by stretching out the intervals between service.
[Images: Jacktamrong/Shutterstock; Hryshchyshen Serhii/Shutterstock; Erman Gunes/Shutterstock; Alen thien/Shutterstock]
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