Gopix International Commercial Brokerage offers this practical guide
To help you understand the crude oil market and its various types,
Enhancing your investment decisions with confidence.

What is Crude Oil?

Gopix International Commercial Brokerage provides this practical guide to help you understand the crude oil market and its various types, enhancing your investment decisions with confidence. Crude oil is a natural liquid primarily composed of a complex mixture of hydrocarbons, along with other organic compounds such as sulfur, oxygen, and nitrogen. Crude oil originates from the decomposition of microscopic marine organisms like algae and plankton, which settled over millions of years under thick layers of sediment. Under the influence of heat and pressure, these materials transform through two main processes:

  • Diagenesis: The organic material transforms into a waxy compound known as Kerogen.
  • Catagenesis: At higher temperatures, kerogen breaks down into a liquid that is crude oil.

Chemical Composition of Crude Oil

  • Hydrocarbons: 50% to 97% depending on the crude type
  • Other Organic Compounds: 6% to 10% (sulfur, oxygen, nitrogen)
  • Heavy Metals: Less than 1% (nickel, vanadium, iron, copper)

The proportions vary depending on the oil source, which later determines refining quality and uses.

Types of Crude Oil

By Chemical Classification

Classification Properties
Sweet Crude Sulfur content less than 0.5%, easier and cheaper to refine.
Sour Crude Sulfur content higher than 0.5%, requires additional processing before refining.

By Density (API Gravity)

Type API Gravity Properties
Light Crude Above 31° Produces highly desirable light fuels (gasoline, clean diesel).
Heavy Crude Below 20-25° Produces heavy fuels and lubricants, requires costly refining.

Comparison of the Most Popular Crude Oils Globally

Type API Gravity Sulfur Content Notes
West Texas Intermediate (WTI) Crude 39.6° 0.24% Sweet and light crude, ideal for gasoline.
Brent Crude 38.06° 0.37% Used as a global pricing benchmark.
Dubai Crude 31° 2% Medium crude, reference for Asian markets.
Russian Export Blend Crude Oil (REBCO) Variable High Sulfur Sour crude, heavily exported to Europe.
Bonny Light Crude High Low Sulfur High-quality Nigerian crude.

For example: Simple distillation of WTI produces only a third of heavy products, compared to half for Arabian Light crude.

How Does Distillation Affect Oil Value?

Light crude produces a higher proportion of light products (gasoline, diesel, kerosene). Heavy crude produces a higher proportion of heavy products (bitumen, lubricants). The higher the proportion of light products, the greater the commercial value of the crude oil.

Oil Classification by Environmental Toxicity (in Case of Spills)

Category Properties
A Light, fast-spreading oils, highly toxic to fish and the environment.
B Medium oils, less volatile but difficult to remove during spills.
C Heavy, tar-like oils, cause suffocation of living organisms.
D Very heavy oils (like bitumen), low toxicity but difficult to clean.

Factors Driving Global Oil Prices and Trade

  • Supply and Demand Balance
  • Geopolitical Crises (Wars, Sanctions)
  • Production Policies from OPEC and Major Countries
  • Global Economic Growth or Recession
  • Natural Disasters Affecting Production (e.g., Hurricanes)

Practical Facts About Crude Oil

  • Barrel: Unit of oil measurement, equals 42 US gallons or 159 liters.
  • United States: Tenth largest global oil reserve.
  • Venezuela: Holds the world’s largest proven oil reserve.
  • Oil is used in: Producing pharmaceuticals, electronics, paints, cosmetics, and sports equipment.

Practical Advice for Businesspeople and Oil Investors

Don’t rely on price alone! Ensure you know: The oil’s source and geopolitical stability, API gravity and sulfur content, contracts and guarantees (SPA – LC – POF), supplier network and their commitment to delivery schedules, supplier reputation and shipment quality via SGS/Intertek reports.

A smart deal combines the right price, high quality, and commercial security. Gopix International Commercial Brokerage provides all the expertise needed for successful deals in the global crude oil market.

Gopix – Your Commercial Broker for Oil Supply

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Gopix – Your Smart Partner for Supplying High-Quality Crude Oil from Russia to Asia and the World