Crude oil is a mixture of liquid hydrocarbons, often found together with natural gas. The main characteristics of crude oil are:
- its density; in the oil industry this is usually measured by its API Gravity.
- its sulphur content.
Crude oil is normally described as sweet (low sulphur) or sour (high sulphur) and light or heavy (depending on its density). Heavier oils may also be described as medium (self explanatory) and bitumen (so heavy it is solid).
A light crude oil is generally one with an API gravity of less than about 40. Brent crude, an important benchmark crude, has an API gravity of 38 to 39. Heavy crudes will typically have an API gravity of 20 or less - the higher the API gravity, the lower the density.
Sweet crude oil has a sulphur content less than 0.5%, anything more is sour.
Heavy crude is:
- harder to handle (it is two thick to pump easily through pipelines unless diluted with light crude)
- more expensive to refine to produce the most valuable petroleum products such as petrol, diesel and aviation fuel.
Sweet crude is preferable to sour because it is also (like light crude) more suited to the production of the most valuable refined products.
Almost every oil field produces crude with a unique mixture of characteristics. It is therefore easiest to follow the prices of key benchmark varieties. The more important benchmark prices include Brent, West Texas Intermediate, The OPEC basket price, Dubai crude, Tapis (Malaysian) and Minas (Indonesian).