Group III Price Surge Continues Amid Supply Shortage

The Strait of Hormuz disruption has severely impacted global Group III base oil exports. Between March and May 2026, Middle Eastern Group III exports to global markets decreased by more than 70%. South Korean exports have partially filled the gap, but the shortage in premium-approved grades remains unresolved.

Group III transaction prices rose roughly $8 per gallon from pre-conflict levels, an increase of over 230% for the 4 cSt grade. Every API base oil group has been affected, with price increases ranging from approximately 120% to more than 250%, depending on the group and grade.

Government data show that input costs have historically risen faster than finished-product prices during supply disruptions, putting pressure on blender margins. Many blenders entered the current crisis without fully restoring margins lost in the prior cycle, limiting their capacity to absorb further increases.