Is There a Motor Oil Shortage in the U.S. in 2022?
Some car owners across the U.S. have been complaining about a motor oil shortage. The reports aren't limited to 2022. In 2021, some people had a hard time getting motor oil for their cars. Is there a motor oil shortage in the U.S.?
The automotive industry has been impacted by global supply chain issues. While there are varying estimates, the global automotive industry likely lost over 11 million units of production in 2021. The dollar amount even looks staggering and is estimated to be in excess of $200 billion.
How is motor oil produced?
Motor oil is made of two components. Base oils account for most of the motor oil while additives make up the rest. The additives include anti-wear additives, friction modifiers, dispersants, detergents, and friction modifiers. There are two types of motor oil—conventional oil and synthetic oil.
What's motor oil used for?
Motor oil serves multiple purposes. It helps lubricate the moving parts and lowers the wear and tear on motor parts. It also helps protect the emission systems and enhances the vehicle’s energy efficiency. Motor oil needs to be changed regularly and not doing so can severely damage the engine.
Energy giants produce motor oil.
Global energy giants like Shell, ExxonMobil, BP, and Valvoline produce motor oil. The question about the motor shortage didn't crop up during any of these companies’ most recent earnings calls.
Car owners have been complaining about a motor oil shortage.
Car owners have been complaining about a motor oil shortage. Scrolling through social media sites like Twitter and Reddit, some consumers have struggled to find motor oil for their cars.
However, there aren't any reports of a nationwide motor oil shortage in the U.S. Looking at the online portals of Walmart, Amazon, and Advance Auto Parts, it doesn't seem like there's a major shortage of motor oil. The products are widely available.
Currently, some grades of motor oil aren't available for delivery. More than a motor oil shortage, it should be seen in the context of the broader supply chain issues that have been plaguing U.S. retail chains and e-commerce companies. There's also a shortage of consumer-packaged goods and the current shortage levels are running above historical averages.
Talking about motor oil, there have been some reports of shortages of both additives and base oil. The truck driver shortage in the U.S. has been putting more pressure on the supply chain.
Electric cars don’t need motor oil.
The global automotive industry is pivoting towards electric cars, which don’t need motor oil. While electric cars have a higher upfront price, they're cheaper in the long term. The maintenance costs are lower and running an electric car is much cheaper than an ICE (internal combustion motor) car.
Amid the current gasoline prices, electric vehicle sales have been soaring. Tesla delivered 936,000 cars in 2021, which was a new milestone for the Elon Musk-run company. Legacy automakers have been investing to ramp up their electric vehicle production and the industry looks set for high growth over the next decade.