Costco Is Rationing Oil And Doubling Its Price As Supply Dwindles

I'm sure you've already noticed, but oil prices are getting downright absurd. Now, those inflated costs are coming for Costco's motor oil. The wholesale retailer may be known for its solidly low prices, but even it can't help the fact that Crude Oil is trading around $100 per barrel right now. Because of that, it's upping prices and tightening how much it'll sell to any one person.

While 10 quarts of Costco's Kirkland Signature full-synthetic motor oil used to set you back $30, and you could buy as much as your heart desired, those days are over — for the time being, at least. That same oil now costs $57.99, and stores are limiting supplies to two per customer per week, according to The Drive.

While it's been par for the course for oil-related prices to increase, seeing them nearly double is unheard of. But as The Auto Wire explains, there's a good reason for it, and it all has to do with what makes the most money. Since motor oil comes from the same barrel as the gas and diesel that fuels our cars, refineries can make more money refining crude into fuel rather than the motor oil Costco sells to customers.

The chemistries of these oils have gotten far more sophisticated than they once were as they're tasked with dealing with ever-smaller engines pushing out ever-increasing amounts of boost. It has led to more rigorous testing and higher standards, making the oil more expensive. They've also got to contend with licensing fees that certain automakers force companies to pay to get their branding on the box. It's not a recipe for cheap oil, is it?

There are a few reasons as to why prices have gotten so high of late. Of course, you've got the U.S. and Israel's war with Iran and the fight over the Strait of Hormuz. That has been driving up prices on its own. However, there's now satellite imagery showing smoke in the vicinity of Saudi Arabia's East-West Pipeline, according to Reuters. It has become a vital means for the kingdom to divert its crude exports from Hormuz, and if it goes down, that spells trouble for everybody.

Oh, and just to make things even more fun, Yemen's Iran-aligned Houthis reached the island of Perim in the Bab el-Mandeb Strait, NPR reports. While it isn't as well known as Hormuz, Bab el-Mandeb is another critical Middle Eastern shipping lane that, if disrupted, could send shockwaves to the global supply chain.

All of this has led to the price of diesel cracking $6 per gallon for the first time in history, with it sitting at $6.06, according to AAA. That also represents an 8-cent jump from just yesterday and a 21-cent increase from a week ago. Unless something changes quickly, I don't expect this trend to slow much in the coming weeks and months. Hell, President Trump doesn't either. He just said gas and oil prices won't come down until after the midterm election in early November, according to CNBC. We're biffed, man.