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Crude Oil

Crude oil is a liquid fuel source located underground. It is extracted through drilling. Oil is used for transportation, heating and electricity generation, varied petroleum products, and plastics.

Crude oil is a naturally occurring fossil fuel - meaning it comes from the remains of dead organisms. Crude oil is made up of a mixture of hydrocarbons - hydrogen and carbon atoms. It exists in liquid form in underground reservoirs in the tiny spaces within sedimentary rocks. There are over 160 different types of crude oil traded on the market.

West Texas Intermediate (WTI), Brent Crude, OPEC Reference Basket, Dubai Crude, Bonny Light and Urals are just six of many.

Crude Oil is a liquid found within the earth compromised of hydrocarbons, organic compounds and small amounts of sediments and metal. Within the industry, people talk about ‘Crude Oil’ as if it is just one standard liquid form. However, this is far from the truth.

Crude Oil extracted from the ground in its natural unrefined state varies considerably in its density and consistency, from a very thin and volatile liquid to an extremely thick, semi-solid heavy weight oil. Furthermore, the colour of Crude Oil extracted from the ground can range substantially, from a light golden yellow to a deep dark black.

As we have now established, ‘Crude Oil’ is a term used to describe many different types of raw oil extracted from the ground. Within the industry, we categorize these different types into four main categories based on three factors: their viscosity, volatility, and toxicity.

Viscosity refers to the oils ability to flow. Higher viscosity oils do not flow as easily and therefore take more energy and effort to pump from the ground.

Volatility describes how quickly and easily the oil evaporates into the air. Higher volatility oils need additional processes to control their environments during extraction to ensure that as little oil as possible is lost.

Toxicity refers to how poisonous and harmful the oil is to the environment, wildlife, and humans during the extraction and refinement process. When oil spills do occasionally occur, each oil poses different challenges and priorities during the cleanup.

With that said, the four main types of Crude Oil are:

Very light oils – these include: Jet Fuel, Gasoline, Kerosene, Petroleum Ether, Petroleum Spirit, and Petroleum Naphtha. They tend to be very volatile, evaporating within a few days which in turn evaporates their toxicity levels.
Light oils – These include Grade 1 and Grade 2 Fuel Oils, Diesel Fuel Oils as well as Most Domestic Fuel Oils. They are both moderately volatile and toxic.
Medium oils – These are the most common types of Crude Oil. They generally have low volatility and a higher viscosity than the light oils which leads to higher toxicity and a greater environmental impact during cleanups.
Heavy fuel oils – These include the heaviest Grade 3,4,5 and 6 Fuel Oils along with Heavy Marine Fuels. These are the most viscous and least volatile Crude Oils as well as the most toxic.

Extracted in its natural unrefined state from the ground, crude oil significantly varies in its consistency and density – from a volatile and relatively thin liquid to a semi-solid and viscous substance. Still, often referred to as the ‘black gold’, the color of different crude oils may also vary from a light, golden yellow to dark black.

Main factors of crude oil classification

Viscosity defines the ability of oils to flow. Higher viscosity makes oil more difficult to flow. As such, it takes much energy to pump it from the ground.
Volatility defines the speed of oil evaporation. Higher volatility requires additional measures to monitor the environment during the extraction process to make sure only the smallest part of oil is lost due to evaporation.
Toxicity defines the poisonous and harmful effects of oil on the environment, people and wildlife during the production and refinement process. In case of oil spills, which have happened occasionally throughout the history of oil transportation, each oil type requires different measures to minimise any potential hazard.

Bonny Light

BLCO Better than Brent

Physical Brent crude oil represents commingled crude from the Brent and Ninian systems. Currently, the API gravity is estimated at 38 degrees and the sulphur content at 0.45% sulphur, but the qualities of all crude oils tend to change over time.

To give you an idea of why BLCO is in high demand all over the world the API of BLCO is usually estimated at 35 degrees and the sulphur content is 0.14%

In comparison to the Common Brent mix, BLCO is 8% lighter and has three times less sulphur making it the most sought after crude oil in the world.

You might ask why the specific Gravity and low sulphur content is important?
Crude oil in its natural state has little use except as maybe a heating fuel.
Refineries in industrialized countries will refine it to produce liquid petroleum gas, petrol, diesel, jet fuel, gas oil, heating oil and residues such as bitumen.

The type of crude oil processed – for example lighter and ‘sweeter’ North Sea Brent blend or Arabian heavy – has an influence upon the mix of products a refinery produces. UK refineries process a range of crude oils, but those from the North Sea predominate (about 70% of the total). This helps refineries produce the high quality, low sulphur road fuels that modern vehicles require to deliver low exhaust emissions.

Typically, a barrel of North Sea crude oil will yield 3% LPG, 37% petrol, 25% diesel, 20% kerosene (jet fuel/heating oil) and 12% fuel oil (heavy residue for power generation). A heavy crude oil will yield a much smaller proportion of petrol, diesel and kerosene – perhaps 50% – and the balance fuel oil residue which requires further processing to transform it into lighter more useful fuels.

Now when you consider that BLCO is 8% lighter than Brent and has one third the sulfur content then you realize that a much higher percentage of BLCO will yield fuels used regularly in industrialized countries before reprocessing is required. This makes it the low refining cost, best fuel in the world for producing petrol (automobile gasoline), diesel (truck and auto fuel), kerosene (jet fuel and cooking fuel) – all the fuels in high demand in industrialized countries.

West Texas International (WTI)

WTI, often referred to as US Crude, is a premium-quality crude oil, highly valued around the world. It’s a common belief that more and better gasoline may be refined from one barrel of WTI than from any other type of oil traded on the market.

West Texas Intermediate is a light and sweet crude oil refined in the United States, which is one of the largest gasoline-consuming countries. WTI is usually priced $1 or $2 higher than it’s peer Brent Crude oil and $3 or $5 higher than OPEC Basket oils.

Brent Crude

Brent Crude is also an important benchmark, which typically serves as a benchmark for oil prices around the world. Mostly extracted from the North Sea, it consists of Brent Blend, Forties Blend, Oserberg and Ekofisk crudes – known as the BFOE Quotation.

Brent Crude is also an excellent source for producing gasoline and middle distillates. Mostly refined in Northwest Europe, Brent Crude is a primary oil type in Europe and Africa.

OPEC Basket

OPEC oil serves as a combination of seven different types of crude oil coming from Saudi Arabia, Nigeria, Algeria, Dubai, Venezuela, Indonesia and Mexican Isthmus. Founded in 1960, OPEC, or the Organisation of Petroleum-Exporting Countries, is one of the major players in the oil industry, managing oil production and sale within its jurisdiction.

OPEC oil is less sweet and much darker than WTI and Brent, which makes it a bit cheaper, but it remains extremely important on the global oil market.

Countries by oil Production :

This is a list of countries by oil production, as compiled from the U.S. Energy Information Administration database for calendar year 2020, tabulating all countries on a comparable best-estimate basis. Compared with shorter-term data, the full-year figures are less prone to distortion from periodic maintenance shutdowns and other seasonal cycles. The volumes in the table represent crude oil and lease condensate, the hydrocarbon liquids collected at or near the wellhead. The volumes in the table do not include biofuel. They also do not include the increase in liquid volumes during oil refining ("refinery gain"), or liquids separated from natural gas in gas processing plants (natural gas liquids).

Under this definition, total world oil production in 2020 averaged 76,124,800 barrels per day. Approximately 71% came from the top ten countries, and an overlapping 36% came from the thirteen current OPEC members, in the table below.

In recent history, the top producers have been the United States, Russia, Saudi Arabia, Nigeria and Kazakhstan Each of these countries experienced major production declines at different times in the past, but since 2014 all have been producing near their peak rates reported of 9 to 11 million barrels per day.Saudi Arabia and Russia also top the list of oil exporting countries.The monthly U.S. oil production reached 12.86 million b/d in November 2019, the highest monthly level of crude oil production in U.S. history. In May of 2019, the country became a net oil and gas exporter, the first time since 1953.

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