Oil prices are rising due to the rapid change in the Middle East situation... A watershed is likely to be achieved next month

*This content was translated by AI.

Recently, as geopolitical risks in the Middle East have intensified, the price of lubricating oil, a key consumption of the domestic automobile aftermarket, has been fluctuating. According to related industries, major manufacturers are expected to adjust their delivery prices for each product starting next month. According to the rumor, there is no official increase from a minimum of 25% to a maximum of 35%.

If the price of lubricating oil is raised to this extent, it is expected that consumer sentiment will more than double from the current level. Even an increase rate of that level at once greatly exceeds the usual inflation rate, and it is interpreted as an force majeure measure due to external factors such as soaring raw material prices.

The background of the lubricant impression is inevitable. This is because the price of base oil, the main ingredient of lubricating oil, soared 73% compared to the previous year at a time when the supply and demand imbalance in the international raw material market is at a serious level. In addition, the price of subsidiary materials, which are essential for the production of products such as containers and additives, has also increased by 43%. Since base oil is a key raw material that accounts for the majority of the components of finished lubricants, it can be analyzed that the cost increase of more than 70% is beyond the manufacturer's own absorption range.

The problem is that if the lubricant price increase is implemented, it could rise again if supply and demand disruptions occur in the future. The manufacturer said that the supply and demand of base oil and subsidiary materials itself is not smooth, making it difficult to produce and supply products normally. If the situation in the Middle East does not stabilize, it could be an additional increase in the future, which is expected to further increase price instability.

As a result, front-line repair shops and automobile management companies are making every effort to secure inventory before the increase is made. As rumored, if the delivery price increases by up to 35%, this will lead to a burden on the purchase cost of maintenance businesses, which will eventually lead to an increase in unit prices such as engine oil exchange services used by consumers. Industry officials believe that confusion at the site will be inevitable due to the large increase and the short notice period, and the maintenance association is also urgently notifying its members and encouraging inventory management and service unit price recalculation.

This is an example of how immediate and powerful the energy crisis from the Middle East affects the real economy, especially the automobile maintenance market. If the high price of oil does not stop, additional chain hikes are likely to occur after April, and price instability in the lubricating oil market is expected to continue for the time being.

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*This content was translated by AI.