Costco has raised the price of motor oil sold under its exclusive private-label brand and is limiting weekly purchases as oil prices continue to climb. The move comes as global oil supplies face disruptions and crude oil prices surge.
The Kirkland Signature full-synthetic motor oil 5-quart two-pack, previously around $30, now costs approximately $58. Costco has implemented a limit of two boxes per customer per week. The retailer is also restricting purchases of Mobil 1's full-synthetic motor oil 1-quart six-pack to five per membership, with that product selling for about $44.
Synthetic motor oil relies heavily on Group III base oils, which are refined from crude oil. The United States imports over 40% of these oils from the Middle East. Recent disruptions in the region, including an attack that will leave an important Saudi oil pipeline out of service for weeks, have impacted global oil flow. The price of Brent crude surpassed $109 per barrel earlier this week as fighting in the Middle East continues to affect oil supplies. Brent crude has risen from under $72 in early July.
The increase in oil prices has contributed to a rise in gasoline costs, with the average price for a gallon of regular gasoline nationwide reaching nearly $4.32, up from $4.08 a month ago. Diesel prices have also reached record highs, averaging $6.23 per gallon on Monday, up from $5.90 a week prior.
Industry analysts suggest that oil companies may be prioritizing the production of gasoline and diesel over motor oil due to higher global demand and volume for these fuels. This shift could further impact motor oil availability and pricing. It remains to be seen if other major retailers like Walmart, Amazon, and AutoZone will follow Costco's lead by adjusting their motor oil prices or purchase limits.