World’s largest carmakers seek to avert motor oil crisis

{"text":[[{"start":12.5,"text":"Carmakers including Volkswagen, Stellantis and Toyota are turning to new blends of motor oil and lubricants to ease a serious supply shortage caused by the Middle East conflict. "}],[{"start":24.4,"text":"After getting through the early months of the war, carmakers have now run out of inventories of high-quality base oils for engine oil that the US and Europe had largely sourced from the Middle East. "}],[{"start":34.95,"text":"They have since found alternative lubricant manufacturers but industry executives warn that those supplies remain tight and vulnerable to any fresh shock. "}],[{"start":44.300000000000004,"text":"For car drivers globally, any further shortage will make their routine oil changes — a procedure critical to prevent engines from malfunctioning — more expensive and prone to delays. "}],[{"start":55.2,"text":"Prices of Group III base oils have almost trebled compared with prewar levels, at about $4,000 per tonne in Europe and the US. "}],[{"start":64.35000000000001,"text":"“Alternative suppliers also have limited volumes, and any renewed shipping disruption, refinery outage or other supply shock could rapidly worsen the situation,” said Holly Alfano, chief executive of the Independent Lubricant Manufacturers Association. "}],[{"start":79.2,"text":"“The industry continues to operate with little margin for error,” she added."}],[{"start":null,"text":"

"}],[{"start":84.15,"text":"The supply chains for Group III base oils, a highly refined oil product that is used to make motor oil, were heavily disrupted in March after Iranian missiles struck Shell’s vast gas-to-liquids plant in Qatar, requiring significant repair work. People close to the industry said some of Shell’s customers had made frantic calls to secure alternative supplies. "}],[{"start":104.95,"text":"Gabriella Twining, global head of base oil pricing at Argus Media, said some suppliers of Middle Eastern Group III oil in Europe and the US had sold out and declared force majeure on those supplies. "}],[{"start":117.15,"text":"“There are fewer and fewer alternatives,” Twining said. “Even if the Strait [of Hormuz] opens tomorrow, we anticipate that Europe and the US would not receive a replenishment shipment until October at the earliest.”"}],[{"start":131.1,"text":"To avert a crisis, carmakers rushed to secure alternative supplies of motor oil — a shift that industry officials said was challenging since manufacturers had to ensure the same level of quality and performance with alternative formulations of the base oils and seek approval for the new products."}],[{"start":147.1,"text":"A manager at a major European lubricants producer said the situation remained fluid. "}],[{"start":152.4,"text":"“Before, 100 per cent of the original equipment manufacturers would be reluctant to accept any other lubricants, but these days some of them are desperate and if the market situation continues like this, they might be forced to be more flexible on the specifications to keep feeding the market,” they said."}],[{"start":null,"text":""}],[{"start":170.5,"text":"Stellantis said it evaluated “reformulated lubricants” and secured alternative products that met “applicable industry standards”. “Our focus remains on . . . minimising any impact to vehicle service and maintenance activities,” it added."}],[{"start":184.35,"text":"Volkswagen cautioned that the shortage of the base oils was “an industry-wide situation beyond the direct control of individual manufacturers”. "}],[{"start":192.2,"text":"But the German carmaker has also secured the necessary supplies for now and is evaluating additional sourcing options that comply with its “technical specifications and quality requirements”. "}],[{"start":203.54999999999998,"text":"Japan’s Toyota also said it was affected but had already secured alternative supplies. "}],[{"start":209.24999999999997,"text":"Since June, customers in Japan at some of Suzuki Motor’s dealerships have faced delays with their routine engine oil changes. Its chief executive Toshihiro Suzuki told shareholders that the group was reviewing the entire supply chain and diversifying its suppliers of the base oils. "}],[{"start":225.74999999999997,"text":"A taxi company in Osaka, in the western part of Japan, said the supply situation had improved slightly but prices of the base oils had doubled, forcing it to raise taxi prices for consumers. "}],[{"start":237.94999999999996,"text":"While many carmakers have secured alternative supplies for now, some analysts warned that the situation could change at any time. Consolidation within the industry has narrowed the number of suppliers, while alternative suppliers such as South Korea have not been able to get their normal crude supplies. "}],[{"start":262.65,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786939992_9457.mp3"}