Historically, one of the many challenges brought by conflict in the Middle East has been the supply of crude oil. It has a long-lasting impact on economies across the globe well after hostilities stop – and, in the case of hostilities in Iran, an end does not appear to be nearing.
Already, the UK has seen prices at fuel pumps yo-yo. But for workshops, the fear mostly concerns supply shortages of general lubricants that keep businesses operative, with one Audi specialist telling CAT it had less than month of stock left to serve the workshops.
Even in peacetime, it typically takes an oil tanker more than a month to make it to the UK for refining. Fear is growing over a resultant shortage of workshop lubricants, let alone the rising prices brought by the effective closure of the Strait of Hormuz, a crucial shipping route.
Speaking on behalf of high street chain A1 Motor Stores, Kym Smith told CAT that there's no cause for concern yet – although Smith admitted it's currently not taking on new trade customers, to protect existing ones. "We're naturally keeping an eye out and may see a slight reduction on the quantities we supply but right now there's sufficient supplies of lubricants," said Smith.
Yet Smith doesn't discount the potential for problems arising for certain modern classics, which demand model-specific specialist lubricants. This may lead to short-term shortages of both their base stock oils and additives.
Justin Wasling, commercial programme director for motor factor GSF, allays any worries: “The lubricant market has been operating against a backdrop of volatility for some time, and suppliers are well‑accustomed to managing this. Established brands with long‑term supply agreements for Group III base oil are well positioned to maintain continuity, which is why availability has remained steady for the majority of the market.
"For workshops, there’s no need to change behaviour – buying in line with normal operational requirements remains the sensible approach” is his advice.
A spokesperson from LKQ UK & Ireland said: “In response to the situation in the Middle East, some of our suppliers have announced changes to the availability and pricing of engine and transmission oils, additives, and other oil-based products, generally in the form of quotas against prior purchasing patterns. We are well used to dealing with changing market conditions and we pride ourselves on being able to respond to uncertainty whilst maintaining great service.
"We have been working proactively with suppliers and manufacturers to maintain stock and availability, which has included removing some products from promotion, introducing maximum purchase limits and passing on any supplier price increases. We are closely monitoring the situation, and we’ll do whatever we can to mitigate its impact while ensuring transparent and open communication with our customers and suppliers throughout.”
Unsurprisingly, suppliers are non-committal on inevitable price rises. Some retailers and workshops are having to pass on any hikes in both materials and their road deliveries to the end user. Confirming Smith's comments, some specialist lube prices have already risen, such as classic oils; one retailer told Classic Car Weekly that the shelf price of a typical 5-litre pack has already swollen by £12, depending on manufacturer. The long-term worry is that motorists – already strapped for cash – will skip services, while squeezed workshops may have to stomach the ever rising costs of running a business or face losing even more custom.
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