Crude Oil Benchmarks, Oil Markers

Crude oil benchmarks are reference points for the various types of oil that are available in the market. Also known as oil markers, crude oil benchmarks were first introduced in the 1980s, with the aim of establishing a standard for the world’s most actively-traded product.

Major Oil Markers

The major crude oil benchmarks are:

WTI (Western Texas Intermediate): It is the benchmark for light sweet crude in the United States. WTI crude oil has a sulfur content of 0.24% and has an API (American Petroleum Institute) gravity of 39.6, while the specific gravity is around 0.827. Owing to its low viscosity and negligible sulfur content, WTI crude is rated as high quality. Its primary use is in the production of gasoline.

Brent Blend: Light sweet crude in the North Sea is classified under the Brent Blend oil marker. The sulfur content is around 0.37, with an API of 38.06. Although Brent Blend crude is not as light or as sweet as WTI, it is good for producing gasoline and middle distillates.

• Dubai Crude: This crude oil benchmark is for light sour crude obtained from the Persian Gulf. It has a sulfur content of 2% and the API is 31. Dubai crude is also known as Fateh and is used for pricing the crude exported to Asia.
• Tapis Crude: It is the benchmark for light sweet Malaysian crude. The sulfur content is as low as 0.03% and the API gravity is around 45.5. Although this oil marker is not as widely traded as WTI, it is used as a benchmark in Asia.
• Bonny Light: It is a benchmark for high grade Nigerian crude, with an API of around 36. Due to its very low sulfur content, it corrodes the refinery infrastructure minimally.
• Isthmus: This is the crude oil benchmark for light crude produced in Mexico. The sulfur content is around 1.45% and the API gravity is 33.74.
• OPEC Basket: It is the pricing data formed by collecting seven crude oils from the OPEC nations (except Mexico). These include Saudi Arabia’s Arab Light, Algeria’s Saharan Blend, Indonesia’s Minas, Nigeria’s Bonny Light, Venezuela’s Tia Juana Light, Dubai’s Fateh and Mexico’s Isthmus. This information is used by OPEC to monitor the global conditions of the oil market.

Oil Markers: Crude Oil Products

The following products can be derived from crude oil:

• Gasoline
• Naphtha
• Kerosene
• Liquefied petroleum gas
• Lubricants
• Perfumes
• Insecticides
• Synthetic rubbers
• Detergents
• Chemical fertilizers

The major importers of oil are the US, China, Japan, Russia and Germany. The top five exporters are Saudi Arabia, Russia, Norway, Iran and the UAE.