GM, the largest automaker in the United States by sales, has rejected the Independent Lubricant Manufacturers Association’s request for relief on Dexos licensing for its members. ILMA made the request last week in response to severe supply constraints caused by ongoing conflict in the Middle East. Iran has closed off the vital Strait of Hormuz and attacked base oil capacity in retaliation for U.S. and Israeli strikes on its regime.
The 118-year-old car company said that, despite ongoing disruptions in the global supply of API Group III base oils, it would not relax the compliance measures set out in its lubricant specification.
Drone and missile strikes have hit neighboring energy infrastructure in Qatar, the United Arab Emirates, and Bahrain. Shell, Adnoc, and Bapco have shut down plants that account for 20% of global Group III capacity. This has cut off base oil supply to U.S. lubricant manufacturers and prevented them from maintaining approved formulations under OEM specifications.
“The current disruption to global Group III base oil supply creates imminent challenges for ILMA member companies working to maintain Dexos compliance. These constraints are the result of factors beyond the control of licensees, including damage to key production facilities and feedstock infrastructure,” Holly Alfano, CEO of ILMA, told Lube Report. “Even as shipping lanes in the Strait of Hormuz begin to reopen, the structural impacts on production capacity will affect supply for at least the next year. ILMA remains committed to preserving the integrity of the Dexos program, and we believe that reasonable, temporary flexibility will help ensure continuity of supply and stability in the marketplace during this period.”
In a press statement last week, ILMA advised its members to submit alternative base oil options for GM’s evaluation, work with additive suppliers to finalize reformulations, and review current inventory and contractual supply obligations. The association also recommended documenting sourcing efforts and compliance-related communications to demonstrate due diligence in navigating the disruption.
From GM’s perspective, the highest priority is protecting its engines and is reluctant to make compromises, an industry insider told Lune Report. However, the current situation has become an emergency and leaves ILMA members with limited options. While GM acknowledged the scale and expected persistence of the supply disruption, it confirmed that it “does not intend to suspend license terminations or other enforcement actions.”
At the same time, GM indicated it would accelerate technical reviews of proposed alternative base oils and formulations submitted by blenders and additive suppliers, with each submission evaluated on its individual technical merits.
Dexos is GM’s global engine oil specification system, first introduced in 2010 to standardize performance requirements across gasoline and diesel engines.
Industry analysts and base oil market reports have documented periodic tightness in Group III supply, often linked to refinery outages, shifting production economics, and regional imbalances in supply and demand. Group III base oils, which are highly refined and widely used in modern low-viscosity engine oils, play a central role in meeting Dexos performance criteria.
ILMA stated that many of its member companies typically maintain approximately one month of forward inventory for Dexos-licensed products, reflecting common supply chain practices in the lubricants sector. Once that inventory is depleted, companies that have not secured GM-approved alternatives could face operational and commercial challenges, including risks related to licensing status and customer commitments. These conditions highlight the time-sensitive nature of securing compliant formulations under current constraints.