Those who are even a little interested in events in the global oil market know that there are various types of oil. Each of them has its own characteristics and individual value. What are these differences? Let's find out in more detail what are the most popular brands of oil in the world.
Mark division purpose
To begin with, let's find out why dividing black gold into oil grades is generally carried out and what this concept means.
Each brand has its own specific composition, which should not differ from the framework provided by the established standard. As a rule, each variety has a specific place of extraction. For example, Brent brand oil is produced only in the North Sea. However, some varieties are formed by mixing components extracted in several regions.
Sorting of black gold by brands was introduced for the convenience of buyers and suppliers. By purchasing a product of a certain variety, the buyer already knows in advance what standard he complies with, what are his physical indicators (flammability, density, sulfur content, etc.).
In addition, a number of organizations, such as OPEC, use a basket of certain grades to determine the weighted average cost of oil.
Quality Indicators and Classification
As mentioned above, the separation of various types of oil into grades is made in order to make it easier to evaluate and compare their qualitative characteristics, in order to facilitate international trade in this product.
The main quality indicators are sulfur content and density. The lower these numbers, the better black gold.
Sulfur content is usually calculated as a percentage. Depending on the sulfur content, it is classified into the following groups: low sulfur (up to 0.5%), medium sulfur (0.5-2%), high sulfur (more than 2%). Sour oil is bad in that for further processing, sulfur has to be removed from it, which is associated with additional costs.
To measure the density, two indicators of kg / m can be used at once3 (g / cm3) and API degrees. According to these indicators, oil is classified as follows:
- superheavy - less than 10 degrees (more than 1000 kg / m3);
- heavy - 10-22.3 degrees (920-1000 kg / m3);
- average - 22.3-31 degrees (870-920 kg / m3);
- light - 31.1-40 degrees (820-870 kg / m3);
- ultralight - 41.1-50 degrees (780-820 kg / m3).
As mentioned above, the lighter the oil, the better it is considered.
Variety of oil brands
In the world, oil brands, or grades, have a fairly wide variety.
At the same time, there are three main brands whose value affects the determination of the price of all other grades of black gold. It is the dynamics of quotations of these types of oil that agencies use in their ratings. These are the brands WTI, Brent and Dubai Crude.
In addition, another 12 varieties are included in the so-called OPEC basket, and a weighted average price is formed based on their value. All these varieties are mined on the territory of the member countries of the organization.
Russia also has its own grades of black gold, the most famous of which is Urals. This species has gained popularity due to its relatively low cost.
WTI - a variety from Texas
One of the three varieties that have a major impact on world prices is WTI. It is mined in the western part of the US state of Texas. This is a very high-quality product, mainly used for the production of gasoline.
The density of this oil is 827 kg / m3, and the content of sulfur elements of 0.4-0.5%.
The main demand for this product in the United States and in China.Although the volume of oil of this brand is less than 1% of world production, its price largely determines the world prices of black gold.
Brent - North Sea wealth
Brent crude oil is perhaps the most quoted of all grades of black gold in the world. It is produced by mixing three types of oil produced from the submarine shelf of the North Sea in territories controlled by the UK and Norway.
When talking about world prices for black gold, by default they mean exactly the price of Brent grade oil.
The main exporters of this type of raw materials are Great Britain and Norway, and its countries in Europe and some Asian countries import it. Currently, the specific share of this brand of oil in world production is about one percent.
Russian varieties
There are also varieties of black gold mined in Russia. The most famous brand of Russian oil is Urals. In addition, Sokol, ESPO, Vityaz, Arctic Oil, Siberian Light are known. These brands are not a standard for setting prices on the world market, but at the same time, they are quite in demand among importers.
The main centers of oil production in Russia are the Volga region, the Urals, western and eastern Siberia, Sakhalin, and the North Caucasus.
Varieties of Russian oil are quite differentiated in quality. We will talk more about them below.
Urals - the most famous Russian oil grade
Urals is a brand of Russian oil, which is obtained by mixing several varieties. Black gold mined in the Urals and Volga region is already mixed in the pipeline with Siberian Light crude oil from Western Siberia. Thus, this variety is obtained.
Despite the fact that the basis of this brand is a product produced in the Urals, which has a fairly high density, by mixing it with a light grade Siberian Light, it is possible to achieve a more acceptable quality. It should also be noted that Urals brand oil has a rather high sulfur content, which is a negative point. So, in the final mixture, the specific fraction of sulfur is up to 1.4% at a density of up to 871 kg / m3.
Urals oil prices are based on the value of the Brent brand. Naturally, since the quality of Russian oil is lower, it costs less than its counterpart from the North Sea. The cost of the Urals brand is $ 1-2 per barrel less than Brent.
Sokol - black gold of Sakhalin
Another Russian oil grade, Sokol, is produced on Sakhalin Island. It is much better in quality than the Urals mixture. Sokol brand oil is light, has a density not exceeding 37 degrees, and the sulfur content is not higher than 0.23%. Thus, this type of black gold in terms of its quality is pretty close to the standards of leading world brands Brent and WTI.
Unfortunately, the volumes of Sokol brand oil production are relatively small, which does not allow for large-scale deliveries of it abroad.
ESPO - Oil of Eastern Siberia
Another popular brand of Russian oil is ESPO. It is mined in Eastern Siberia. This variety is on sale in the countries of Asia, and also in the USA. This brand has a fairly acceptable quality, even despite the difficulties of transportation, it accounts for up to 0.3% of world exports.
The cost of ESPO oil is tied to the price of black gold from the Persian Gulf brand Dubai Crude. At the same time, specialists note that Russian oil has a higher quality than the Middle East counterpart. So, ESPO has a density of 34.8 degrees with a sulfur content of 0.62%. These indicators are also better than that of another popular Russian variety - Urals.
This allows us to talk about the great prospects of this brand in world markets. With good promotion, the popularity of the variety will grow from year to year, especially in Asian countries. Some experts believe that over time, ESPO is quite capable of becoming the benchmark in the region.
Today, the main problem, which significantly slows down the process of increasing the volume of sales of this type of oil, is the issue of transportation. But after the construction of the ESPO pipeline, it can be considered largely resolved.
Which oil is better?
The question of which grade of oil can be considered the best does not have a clear answer. The quality here is quite important, but far from the only factor. The indicator “price - quality” plays an equally important role in determining the preferences of the buyer. Not to mention the purpose for which oil is purchased. It makes no sense to purchase an expensive grade of Brent, for example, for the manufacture of fuel oil. Cheap brands will do just fine for this.
The availability and cost of transportation to a specific buyer also play a very important role in shaping preferences. Oil is a rather specific product, so the factor of delivery complexity is quite significant in the eyes of buyers.
Nevertheless, as we found out, there are elite varieties in the world based on the value of which the price for other brands of oil is formed. First of all, these are Brent, Dubai Crude and WTI, as well as 12 OPEC black gold brands that form the basket introduced since 1987.
Not a single grade of Russian oil is yet among the reference grades, although Russia ranks second in the world in exporting black gold. But, given the active position of the Russian government and domestic oil companies in promoting their products, it is possible that this situation will change in the near future.
