According to a new report by the International Energy Agency (May 2026) and additional statistics from specialized lubricant industry journals, the current crises in the Middle East have created an unprecedented supply shock in the production and supply of raw materials for this industry.
As the refining capacity requirements of the crude oil market have experienced a decrease of 4.5 million barrels in the second quarter of 2026 compared to the same period last year, other downstream industries, including base oils, have not been immune to the effects of this statistic.
More than one billion barrels of crude oil have been removed from the orbit by Persian Gulf producers, and in the continuation of this trend, we have faced a 21% decrease in global Group 3 base oil production capacity, which is equivalent to about 10% of the total global base oil capacity, and this statistic will be very significant. The 5 million barrel per day decrease in refinery crude oil demand in April 2026 also indicates a sharp decrease in refining activity.
These figures show that the base oil production capacity in the Middle East (especially Saudi Arabia, the UAE, and Bahrain) has declined sharply, and this downward trend has spread to other neighboring countries and even more distant continents.
we have faced a 21% decrease in global Group 3 base oil production capacity, which is equivalent to about 10% of the total global base oil capacity, and this statistic will be very significant.
The Europe continent, which had experienced a reduction in refining capacities for other reasons before the current tensions, is now facing a new challenge, and the sharp decrease in the supply of Group 3 base oils from the capacity of the Middle East has been detrimental to their production and consumption market. This is because this European market, due to the presence of modern vehicles and the urgent need for rich and synthetic formulations to lubricate their engines, has allocated a share of between 35 and 40 percent of Group 3 base oil consumption. It seems that European manufacturers are trying to deal with this challenge by replacing Group 2 Plus or Group 3 base oils with lower quality from Middle Eastern refineries.
Therefore, the increase in the cost of synthetic oils in the Green Continent has increasingly overshadowed their consumer market. Therefore, in order to adjust this trend of 40-50% increase in Group 3 base oils, manufacturers have tried to make the steep price increase more bearable for the consumer by changing their formula taste, which, of course, has ultimately been judged by a 30-40% increase in the final product in the market.
The use of Group 3 base oils in the formulation of automotive lubricants, in addition to complying with the environmental standards developed by these European countries, has been in line with the longevity and greater compatibility with vehicle engine alloys and longer replacement service times.
When replacing them with Group 2 Plus base oils, these efficiencies will be weaker and will result in reduced thermal stability and increased oil consumption in modern engines. Modern gearboxes of new generation vehicles will also not be immune from the possible damage of this crisis, with changes in the formulation. For example, CVT (Continuously Variable Transmission) gearbox oil requires low viscosity, high thermal stability, and precise friction coefficient for the belt and chain.
If the formulation is changed and the base oil of group three is replaced with group two, it will reduce thermal stability, increase the gearbox temperature, reduce the useful life of the belt, and increase the possibility of belt slippage and premature failure.
Also, DCT (Dual Clutch Transmission) gearbox oil requires appropriate viscosity, high stability at high temperatures, and high anti-wear properties. If the formulation is changed, gear oil can be produced at a more affordable price. However, these changes can cause premature wear of the dual clutches, reduce the useful life of the gearbox, and increase vibration and instability in gear shifting. This can also be applied to 10-speed dual clutch gearboxes, which are more sensitive and, if professional raw materials are not used, reduce the lubricant life from 50,000 kilometers to 20,000 or less.
These same formulation changes for AT gearboxes can lead to increased foam and reduced hydraulic efficiency, reduced torque converter service life, and increased probability of failure of solenoid valves and hydraulic valves.
Considering the current conditions of Group 3 base oil refinery output by the end of 2026, it is likely that the price of this strategic product can be expected to increase by 50-70% above its price before the current crisis.
Of course, these calculations are interpreted for European countries, and naturally, the effective coefficient of sanctions should also be calculated for Iran.
Also, for other synthetic base oils such as polyalphaolefins, an increase of 30 to 50% is not out of the question.Usually, large and well-known companies in such crises, while maintaining the initial quality, offer their products at increased prices in the market, while weaker manufacturers, probably by reducing their quality, try to benefit from the advantage of competitive prices in the market.
Of course, in parallel with the previous two cases, one should not be unaware of the harm of counterfeit products with false labels in this market turmoil.Here, consumers can protect themselves from the hidden harms of inferior products by making the right choice.
If they are unable to choose a high-quality and expensive product, they should control the damaging factors in their car by keeping in mind the shorter useful life of poor-quality products, regularly monitoring lubricants, shortening the period of periodic service, and replacing these effective fluids.