Berlin, May 7, 2026, 20:03 CEST
High-grade base oils—an obscure yet essential ingredient for lubricants—are turning hard to find for some German automakers, despite lower crude prices sparked by optimism around a potential U.S.-Iran agreement. According to Argus Media, as cited by N-tv, supplies of Group III base oils, the type required for the synthetic motor oils in modern engines, are already running thin for certain manufacturers.
Right now, oil prices reflect hopes for peace even as supply lines lag behind. Brent crude climbed 0.7% to $101.98 a barrel at 1:36 p.m. EDT, according to Reuters, having earlier dropped over $5 for both main contracts. The move followed news that Iran rejected what it described as an unrealistic U.S. proposal to reopen the Strait of Hormuz.
Base oils come out of refineries and get mixed with additives, turning them into lubricants. Group III is what goes into premium synthetic motor oils. Group II tends to end up in more basic lubricant formulations, the kind that bus operators and truck fleets rely on—so the current shortage stretches beyond just passenger vehicles, reaching into public transit and freight operations.
Gabrielle Twinning, who tracks base oils at Argus Media, told n-tv that automakers may be forced to cut production if alternative supplies aren’t found and the crunch drags on. She cautioned a lack of high-quality base oils could start interfering with logistics in just a few months, since trucks and buses can’t run without commercial-vehicle oils.
Physical constraints are key. According to Argus, Group III supplies are still stuck in the Mideast Gulf with Hormuz basically shut. European spot prices for a standard Group III grade have jumped 70% since the start of the war. The Gulf accounted for 72% of Europe’s Group III imports in 2025, Argus reported, referencing EIA and Kpler numbers.
Crude traders pounced on the peace news. According to Finanzen.net, citing dpa-AFX, Brent for July had earlier slipped as low as $96.44 on Thursday, marking a 4.8% drop for the day. But Vandana Hari, who runs Vanda Insights, flagged that the selloff might be overdone—with the market’s direction still tied to the timing and process around the reopening of Hormuz.
On Thursday, Iran injected fresh uncertainty, setting up a new agency tasked with approving transits and imposing tolls on ships passing through the strait, according to AP. The foreign ministry said messages from Pakistan, acting as mediator, were still under consideration and that no reply had gone to the U.S. yet.
There’s only so much give left in global stocks. According to Goldman Sachs, worldwide oil inventories now sit at the equivalent of 101 days of demand and might slide to 98 days by the end of May. Refined-product reserves have dropped, too—down to 45 days, compared with 50 days before the U.S.-Israeli war on Iran.
Fuel markets are feeling the pinch. According to Reuters, Asian shipments of jet fuel, diesel and gasoline in April dropped close to 3 million barrels per day compared with pre-war norms. Jet fuel exports from Asia tumbled to 596,000 bpd—marking the lowest level recorded by Kpler since 2017.
German heating-oil buyers are catching a break in the short term, though the reprieve is limited. On May 7, HeizOel24 pegged the average price at 123.76 euros per 100 liters—a 1.43% slide from the previous day. Even so, that’s still 29.92 euros per 100 liters higher compared to three months ago.
German automakers are facing a squeeze on lubricants just as a tough week unfolds. BMW stuck to its 2026 outlook even after reporting a 25% drop in first-quarter profit, according to Reuters. Mercedes-Benz and Audi aren’t escaping the heat either, with Chinese competitors stepping up their European push and the specter of U.S. tariffs muddying forecasts.
Even if a peace agreement comes together, the underlying supply crunch won’t resolve overnight. TotalEnergies boss Patrick Pouyanné flagged “some very low inventories” as the likely exit point for the market, post-conflict. Over at Equinor, Anders Opedal put the timeline to anything like normal at no less than six months. And Exxon Mobil’s Darren Woods? He thinks the market still hasn’t absorbed the full fallout. Reuters
Germany’s immediate challenge: can alternate base-oil shipments get to Europe in time, or will lube producers have to start rationing to factories and truck operators? Delaying oil changes—sure, that’s possible. Not so easy with first-fill engine oil or what keeps heavy-duty fleets running.
