Costco Wholesale (COST) is known for holding prices down, so its recent move was out of the ordinary. The retailer nearly doubled the price of its Kirkland Signature full-synthetic motor oil. The 10-quart pack, which was previously priced around $30, is now being sold for $58. Costco also capped members at two packs a week and put limits on its Mobil 1 packs, too.
Here’s the issue that forced the price hike. Synthetic oil depends on something called Group III base oil, and the U.S. imports close to 44% of it from the Persian Gulf. Conflict in the region has made this complicated. A March airstrike on a major Qatari facility made it worse, knocking out a big chunk of global supply for at least a year. At the same time, refiners are turning crude into diesel and jet fuel instead, since those pay far better than motor oil right now.
