Costco raises Kirkland motor oil price, caps weekly purchases
Costco has raised the price of its Kirkland Signature full-synthetic motor oil and is capping how much each member can purchase weekly. The move comes as Americans are already contending with high grocery prices and inflation, leaving those who change their own oil with another hit to their wallets.
The Kirkland Signature full-synthetic motor oil 5-quart two pack now costs around $58, compared to the roughly $30 it sold for last year. Costco is also limiting customers to two boxes a week.
The wholesale club operator is restricting purchases of Mobil 1’s full-synthetic motor oil 1-quart six pack, which sells for about $44, to five per membership. Costco did not immediately reply to a request for comment.
Today’s synthetic motor oil is heavily dependent on Group III base oils, which are mostly made from refining crude oil. It’s estimated that the United States imports more than 40% of these oils from the Middle East, which has been dealing with disruptions to oil supplies since the start of the Iran war earlier this year.
The price for a barrel of Brent crude went above $109 on Monday morning as fighting in the Middle East keeps squeezing the global flow of oil.
An important Saudi oil pipeline will mostly be out of service for weeks following an attack last week, two regional officials told The Associated Press. The pipeline offered a way for Saudi Arabia to shift exports to the Red Sea and avoid the Persian Gulf’s Strait of Hormuz, where Iranian attacks have stifled the movement of oil tankers.
Brent has jumped from less than $72 in early July as doubts rise that the United States and Iran can come to an agreement that would allow oil tankers to freely exit the Persian Gulf through the strait again.
The rise in oil prices has helped send the average cost of a gallon of regular gasoline across the country to nearly $4.32 from $4.08 a month ago and $3.18 a year ago, according to AAA.
Meanwhile, diesel prices in the U.S. hit yet another record on Friday, soaring past $6 a gallon on average. On Monday, prices were still climbing, with diesel at $6.23 a gallon on average, according to AAA. A week ago, the average was $5.90 a gallon.
With oil prices continuing to rise due to ongoing tension in the Middle East, oil companies stand to profit more from turning refining crude oil into diesel or gasoline than motor oil. There’s considerably more demand for diesel and gasoline worldwide than there is for motor oil, and the daily volume is high. So oil companies are likely to put more of their effort into diesel and gasoline and make less motor oil.
It remains to be seen if other motor oil retailers like Walmart, Amazon and AutoZone will boost their prices or set purchase limits. Walmart, Amazon and AutoZone did not immediately respond to requests for comment.
