Transmission Fluid and Synthetic Oil Reserves Could Run Dry in June, Supply Chain Problems Signal a Long Wait for Normalcy

The military conflict involving Iran and the Middle East region has affected oil supply throughout the world, and the problems arising out of it won’t just be limited to rising fuel prices.

The issue could affect the automotive industry at a much deeper level, even going to the extent of transmission fluid being unavailable and synthetic motor oil being in short supply, which would prevent certain cars from being serviced.

Not only that, companies rolling out new internal combustion cars would require oil to sell them, but the oil shortage could force automakers to switch to other grades of oil.

The conflict has not ended yet, and reports suggest that the oil scarcity issue could spill into 2027. Several manufacturers, like Nissan and Toyota, have already adopted damage control measures to minimize the problems this shortage could lead to.

Shortage of Group III Base Oils Could Impact the Automotive Industry

According to a report by GM Authority, a major disruption in the supply of Group III base oils, which are used to make synthetic motor oil, transmission fluid, and other lubricants, could lead to a severe shortage.

The Independent Lubricant Manufacturers Association revealed that supply interruptions are expected to last until mid-2027, meaning the automotive sector will have to brace for a shortage for at least another year.

Group III base oils sourced from the Gulf region could be exhausted by June, meaning companies will be involved in heavy negotiations with alternative sources because, after all, how much reserve stock can there be?

The challenge is that alternative suppliers, such as South Korean refineries, also rely on crude from the Middle East, and many refiners have shifted their priority to jet fuel and diesel production over base oils.

Automakers Brace for What Is to Come

Nissan has reportedly begun storing select synthetic oils, limiting the supply of 5W-30 to 70% when compared to 2025 figures, while the supply of 0W-20 has been restricted to 55%.

Toyota reportedly released a bulletin warning of a potential shortage of some Genuine Toyota Motor Oil products, and took steps to minimize the impact.

Experts warn that the shortage of Group III base oils could affect certain vehicles manufactured in the last ten years, since they require synthetic oil to function according to the manufacturer’s recommendation.

As a result, dealership service operations could face immense pressure when it comes to performing routine services on cars that require synthetic oil and fulfilling other warranty-related obligations.

There could be a shortage of other lubricants made from Group III base oils, and automakers could face problems even in the production of new cars, given the challenges involved in procuring such lubricants.

The GM Authority report states that retailers and service chains have sufficient stock of lubricants, but there is no estimate of how many months the stock would last.

Valvoline is one such company that is said to have enough stock on hand and is working on solutions to reduce the impact of a potential shortage.

Despite the available buffer, the disruption of the global oil supply would only compound the problem that has appeared on the horizon if the geopolitical scenario does not go from red to green.

The situation could get worse with continued oil scarcity, fewer product choices since dealers will have no choice but to rely only on what they have in stock, and a rise in the prices of oil and lubricants.

While there remains no reason to panic at this point in time, it is always advisable to anticipate how the situation could unfold in the near future and act wisely.