Crude oil is a mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs. It remains liquid at atmospheric pressure after passing through surface separating facilities. Crude oil is one of the most actively traded commodities and plays a significant role in global economies.
How is Crude Oil Created?
It forms through the heating and compression of organic materials over a long period. Most extracted oil originates from prehistoric algae and zooplankton remains. These remains, mixed with sediment, undergo a transformation process involving diagenesis and catagenesis.
Types of Crude Oil
Bonny Light Crude Oil (BLCO): A high-grade Nigerian crude oil with low sulfur content, reducing refinery infrastructure corrosion.
Russian Export Blend Crude Oil (REBCO): Includes Urals Blend and Siberian Light, where Siberian Light has lower sulfur content.
Eastern Siberian Pacific Pipeline Oil (ESPO): Exported from Russia to Asian Pacific markets via a major pipeline.
Light vs Heavy Crude Oil
Light Crude Oil: Low density and viscosity, producing higher gasoline and diesel yields.
Heavy Crude Oil: Higher density and viscosity, requiring extensive refining.
Crude Oil Trading
The most commonly traded crude oil types are WTI and Brent. Both are light and sweet, making them ideal for refining. WTI is primarily extracted in the U.S., while Brent originates from the North Sea. Trading platforms include NYMEX for WTI and ICE in London for Brent.
