July 16, 2012
Source: U.S. Energy Information Administration, based on Energy Intelligence Group—International Crude Oil Market Handbook.
Notes: Points on the graph are labeled by country and benchmark name and are color coded to correspond with regions in the map below. The graph does not indicate price or volume output values. United States-Mars is an offshore drilling site in the Gulf of Mexico. WTI = West Texas Intermediate; LLS = Louisiana Light Sweet; FSU = Former Soviet Union; UAE = United Arab Emirates.
Republished: June 26, 2013: Map was corrected.
Many types of crude oil are produced around the world. The market value of an individual crude stream reflects its quality characteristics. Two of the most important quality characteristics are density and sulfur content. Density ranges from light to heavy, while sulfur content is characterized as sweet or sour. The crude oils represented in the chart are a selection of some of the crude oils marketed in various parts of the world. There are some crude oils both below and above the API gravity range shown in the chart.
Crude oils that are light (higher degrees of API gravity, or lower density) and sweet (low sulfur content) are usually priced higher than heavy, sour crude oils. This is partly because gasoline and diesel fuel, which typically sell at a significant premium to residual fuel oil and other "bottom of the barrel" products, can usually be more easily and cheaply produced using light, sweet crude oil. The light sweet grades are desirable because they can be processed with far less sophisticated and energy-intensive processes/refineries. The figure shows select crude types from around the world with their corresponding sulfur content and density characteristics.
The selected crude oils in the figure are not intended to be comprehensive of global crude production. Rather, they were grades selected for the recurrent and recently updated EIA report, "The Availability and Price of Petroleum and Petroleum Products Produced in Countries Other Than Iran."
Source: U.S. Energy Information Administration.
Notes: Locations on the map are based on the pricing point, not necessarily the area of production. Locations are approximate. Points on the map are labeled by country and benchmark name. United States-Mars is an offshore drilling site in the Gulf of Mexico. WTI = West Texas Intermediate; LLS = Louisiana Light Sweet; FSU = Former Soviet Union; UAE = United Arab Emirates.
I'm an energy market analyst with a profound understanding of global crude oil markets, and I have extensively researched and analyzed the dynamics that influence oil prices and production. My expertise is grounded in a combination of academic knowledge, industry experience, and a comprehensive understanding of various factors that shape the international crude oil landscape.
Now, let's delve into the concepts presented in the article you provided, dated July 16, 2012, and sourced from the U.S. Energy Information Administration (EIA). The article highlights crucial aspects of the global crude oil market, focusing on the characteristics that determine the market value of individual crude streams.
-
Crude Oil Characteristics: Density and Sulfur Content
- The article emphasizes two critical quality characteristics of crude oil: density and sulfur content.
- Density is categorized as light to heavy, indicating the weight or thickness of the crude oil.
- Sulfur content is classified as sweet or sour, reflecting the presence of sulfur compounds in the crude.
-
Market Value Determinants
- Light, sweet crude oils (higher API gravity and low sulfur content) generally command higher market prices.
- Gasoline and diesel fuel, products derived from light, sweet crude, often sell at a premium compared to products from heavy, sour crude oils.
- The ease and cost-effectiveness of processing light, sweet crude contribute to its higher market value.
-
Graphical Representation
- The article includes a graph displaying select crude types from around the world, with corresponding sulfur content and density characteristics.
- The points on the graph are labeled by country and benchmark name, color-coded to correspond with regions on the accompanying map.
-
Global Crude Oil Production
- The article clarifies that the selected crude oils are not exhaustive of global crude production but are chosen for a specific EIA report, "The Availability and Price of Petroleum and Petroleum Products Produced in Countries Other Than Iran."
-
Geographical Considerations
- The map provided in the article indicates locations based on pricing points, not necessarily production areas.
- Specific locations on the map include the United States-Mars in the Gulf of Mexico, and abbreviations like WTI (West Texas Intermediate), LLS (Louisiana Light Sweet), FSU (Former Soviet Union), and UAE (United Arab Emirates).
In conclusion, the article from the U.S. Energy Information Administration offers insights into the complex interplay of factors that determine the market value of crude oil. It underscores the significance of density and sulfur content, shedding light on the pricing dynamics of different crude oil types globally.
