In the last decade, the topic of energy resources has been increasingly covered by the media. Oil is no exception. The cost of this type of hydrocarbon raw material is formed depending on the trading exchange, as well as its grade. Oil grades are characterized by their chemical composition and place of origin, which directly affects their value.
General information
A grade or brand of oil is a qualitative characteristic of raw materials, which are produced in one field, which differs from others in its composition and uniformity. Oil in different wells has its own characteristics, and therefore it became necessary to classify it. To simplify the export system, a conditional division into light and heavy oil was adopted.
More than 20 grades are mined annually worldwide. For example, the main export grades of oil in Russia are heavy oil Urals and light Siberian Light, while a total of 5 grades are produced. There are over a dozen brands in the United States. In view ofof such a variety, not all of them can be sold on international exchanges. Therefore, the price of each brand is determined relative to marker grades - British Brent oil, American WTI and Middle East Middle East Crude.
The cost of each brand of oil is determined by a discount or premium in relation to the marker grade, depending on the quality of the raw material. For example, heavy oil with a high content of impurities and sulfur will be traded cheaper than the same Brent or WTI.
Characteristics of raw materials
Oil is usually described as a black oily liquid, but this definition is not true in all cases. The color scheme can vary from black to yellow and transparent.
Viscosity and melting coefficients are also the most important characteristics. Some grades of oil can solidify at low temperatures, while others remain liquid in all weather conditions. Due to such heterogeneity of characteristics, the conditional division of varieties into light, medium and heavy has been adopted.
In its pure form, this raw material is practically not used, therefore, to obtain a commercial product, oil is processed. The speed and efficiency of processing is directly proportional to the density of raw materials and the content of sulfur and impurities.
Light grades are more expensive because they produce products such as gasoline, diesel fuel, kerosene. Heavy grades produce fuel oil and furnace fuel, which are used less often and therefore cost less.
Interesting facts
Until 1973, the cost of "black gold" was no more than 3 dollars. The price increased 4 times after the ban on the export of raw materials from Arab countries. In the early 80s, during the crisis in the Middle East, the cost fluctuated between 15 and 35 dollars.
Oil with a low sulfur content is called "sweet", and with a high - "sour". She received this name because in the 19th century, oilmen tried it. The cost of refining sour oil is much higher than that of sweet oil. Therefore, the sweet is always in the price.
A distinctive feature of the stock exchange in New York is that the dollar price of raw materials per barrel is quoted, and for products from it - in cents per gallon.
There is an international oil exchange in London, where more than 50,000 futures for various brands of oil, as well as Brent blends are traded during the day.
Supplies of physical oil are carried out only for 1% of concluded futures contracts.
Oil grades in Russia
In total, 6 grades of oil are exported from Russia.
Urals is mined in the Khanty-Mansi Autonomous Okrug, as well as in the Republic of Tatarstan. This grade is characterized by a high content of sulfur and heavy hydrocarbon compounds. The price of Urals oil is determined by its discounting for the North Sea Brent grade. This variety is obtained by mixing West Siberian oil with Volga oil, which is why its quality suffers. In the last decade, attempts have been made to exclude Tatarstan raw materials from the composition of Urals. The price of Urals oil is formed onCommodity Exchange RTS.
Siberian Light is mined in the Khanty-Mansi Autonomous Okrug. The sulfur content in it is almost 3 times less than in Urals.
Arctic Oil is produced offshore in the Pechora Sea. This is the first Russian oil field located in the Arctic Ocean. A distinctive feature of this brand of Russian oil is its high density and high sulfur content. Oil is produced 60 km from the coastal zone from a fixed platform.
Sokol is characterized by a low content of impurities. Explored on Sakhalin Island. Export is carried out through the Khabarovsk Territory.
ESPO is characterized by low density and low sulfur content, mined in Eastern Siberia. Transported via the ESPO pipeline.
Vityaz - Sakhalin grade of oil, similar in quality to Oman light oil. Exported via the Trans-Sakhalin oil pipeline.
World oil grades: global classification
The entire world classification of "black gold" is based on two brands - Sweet crude oil and Light Sweet crude oil.
Sweet crude oil - raw materials with a sulfur content of not more than 0.5%, as well as hydrogen sulfide and carbon dioxide. Currently, this brand is used in the production of gasoline.
Light Sweet crude oil contains little wax. Viscosity and density may vary.
Based on the characteristics of these varieties, the following designations began to be attributed to oil grades:
- light (high density);
- crude (low wax);
- heavy(low density);
- sweet (little sulfur).
Reference grades
In total there are 3 grades of oil in the world, which are considered to be reference.
Brent (crude) - medium-density North Sea crude, contains up to 0.5% sulfur impurities. It is used in the production of medium distillers, as well as gasoline. The price of Brent oil is the basis for pricing more than a third of all other grades in the world.
WTI is mined in the US state of Texas. Has a density higher than Brent, sulfur content - up to 0.25%.
Dubai Crude - oil from the UAE. Also called Fateh. Has a low density. Contains up to 2% sulfur impurities.
Varieties included in the OPEC export basket
OPEC (Organization of Petroleum Exporting Countries) uses the OPEC basket index to calculate the cost of a particular grade. To date, the OPEC basket includes 11 brands of "black gold":
- Saharan Blend (Algeria);
- Es Sider (Libya);
- Arab Light (Saudi Arabia);
- Basra Light (Iraq);
- Bonny Light (Nigeria);
- Iran Heavy (Iran);
- Kuwait Export (Kuwait);
- Murban (United Arab Emirates);
- Qatar Marine (Qatar);
- Girassol (Angola);
- Merey (Venezuela).
Oil is the backbone of the economy of most countries - both developing and developed. Oil exploration is carried out both on the continents and on the shelves of the oceans. There are more than 20 different varieties of "black gold" in the world. However, each varietyis distinguished by its unique chemical composition. Brent, WTI and Dubai Crude are considered to be the main reference brands influencing global pricing. Brands of Russian exported oil: Urals, Siberian Light, Arctic Oil, Sokol, ESPO, Vityaz. Futures contracts for the supply of raw materials are concluded on world commodity exchanges. Basically, these are the New York and London Stock Exchanges. The RTS exchange operates in Russia (Moscow).
