Lecture 1 Crude Oil Quality

Prof. Dr. H.Z. Harraz Presentation
BENCHMARKS OF CRUDE OILS
Hassan Z. Harraz
hharraz2006@yahoo.com
2015- 2016
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LECTURE # 6
BENCHMARKS OF CRUDE OILS
© Hassan Harraz 2016

Outline of Lecture :
INTRODUCTION
1) THE HYDROCARBONS IN CRUDE OIL
2) THE CLASSIFICATION OF PETROLEUM
a) Sulfur Content of Crude Oil:-
i) Sweet Crude Oil
ii) Sour Crude Oil
b) API (American Petroleum Institute) Gravity:
3) DIFFERENT CRUDE OIL QUALITIES
4) THE PRIMARY TYPES OF CRUDE OIL
5) BENCHMARKS OF CRUDE OILS
6) TYPES OF BENCHMARKS OF CRUDE OILS
a) West Texas Intermediate (WTI)
b) Brent
Dated Brent
c) OPEC Basket (ORB)
ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC)
The new OPEC Basket (ORB):
d) Dubai and Oman Crude {Oman (sour)}
e) Bonny Light
f) Tapis Crude
g) Mexico's Isthmus (or Isthmus-34 Light)
h) Maya
Image Courtesy - http://www.news.az/photos/page-photo/133429.jpg/
© Hassan Harraz 2016 3

INTRODUCTION
Crude oil is not a single, indistinguishably homogenous substance without any unique
differentiation, but this is actually not the case at all! In fact, there are many different kinds of
oil.
In its natural, unrefined state, crude oil ranges in density and consistency, from very thin,
light weight and volatile fluidity to an extremely thick, semi-solid heavy weight oil.
There is also a tremendous gradation in the color that the oil extracted from the ground
exhibits, ranging all the way from a light, golden yellow to the very deepest, darkest black
imaginable.
The petroleum industry often uses references to “Geographical Locations” in order to
descriptively classify crude oils. This is due to the fact that oil from different geographical
locations will naturally have its own very unique properties. These oils vary dramatically from
one another when it comes to their viscosity, volatility and toxicity.
The term “Viscosity” relates to the oil's resistance to flow. Higher viscosity crude oil is
much more difficult to pump from the ground, transport and refine.
The term “Volatility” describes how quickly the oil evaporates into the air. Oils that are
naturally highly volatile need additional effort to ensure that temperature regulation and
sealing procedures loose as little oil as possible.
The term “Toxicity” refers to how dangerously poisonous the oil & its refining
processes are to local life, from humans, to flora and fauna as well as other
environmentally fragile living entities and organisms. If an oil spill were to occur, each
type of oil presents quite unique “Clean up” challenges, procedures and priorities!

The Uses of Crude Oil
Uses of Crude Oil
Gasoline Distillate Fuel Oil
Kerosene Jet Fuel Residual Fuel Oil
Liquefied Refinery Gases Still Gas
Coke Asphalt and Road Oil
PETROCHEM ICAL FEEDSTOCKS Lubricants
Kerosene Other
Uses of Crude Oil
Gasoline Distillate Fuel Oil
Kerosene Jet Fuel Residual Fuel Oil
Liquefied Refinery Gases Still Gas
Coke Asphalt and Road Oil
PETROCHEMICAL FEEDSTOCKS Lubricants
Kerosene Other
PETROLEUM
Saturates
Aromatics
Asphaltics
n-
alkanes C5 - C44
branched alkanes
cycloalkanes (napthenes) single ring
condensed ring
nitrogen
oxygen
sulfur
containing compounds

Composition of Crude Oil
CRUDE OIL
HYDROCARBONS NON-HYDROCARBONS
ALIPHATICS AROMATICS NAPHTHENES SULFURS NITROGENS OXYGENS METALLICS
25% 17% 50% <8% <1% <3% <100PPM
C1 - C60 (C6H5)n CYCLOALKANES
SH
S
N
H
O
COOH

The hydrocarbons in crude oil can generally be divided into four categories:
i) Un-Saturates
 Paraffins: These can make up 15 to 60% of crude and have a carbon to hydrogen
ratio of 1:2, which means they contain twice the amount of hydrogen as they do
carbon. These are generally straight or branched chains, but never cyclic (circular)
compounds. Paraffins are the desired content in crude and what are used to make
fuels. The shorter the paraffins are, the lighter the crude is.
 Aromatics: These can constitute anywhere from 3 to 30% of crude. They are
undesirable because burning them results in soot. They have a much less hydrogen in
comparison to carbon than is found in paraffins. They are also more viscous. They are
often solid or semi-solid when an equivalent paraffin would be a viscous liquid under
the same conditions.
ii) Saturates
 Napthenes: These can make up 30 to 60% of crude and have a carbon to hydrogen
ratio of 1:2. These are cyclic compounds and can be thought of as cycloparaffins. They
are higher in density than equivalent paraffins and are more viscous.
 Asphaltics: These average about 6% in most crude. They have a carbon to hydrogen
ratio of approximately 1:1, making them very dense. They are generally undesirable in
crude, but their 'stickiness' makes them excellent for use in road construction.
1) THE HYDROCARBONS IN CRUDE OIL

 For several decades now the crude oil or petroleum industry has classified the raw crude by geographic region (i.e., the
location from which it was extracted).
 However, all oils from a particular region are not created equal.
 Further classification of petroleum, derived from the density of the raw petroleum (API gravity) and its various non-
hydrocarbon components (especially sulfur), is then added to the geographic designation.
 The end result of all this classification helps:
i) determine the price of a specific barrel of crude, as well as
ii) how much demand there is for that particular oil.
 When considering the petroleum classification it is important to consider the fact that the overall classification will have
an effect on the value, not just the physical properties.
 For example, petroleum with a geographical classification from one region of the world may be expensive to transport
to another region of the world regardless of the suitability of the raw petroleum as an overall substance.
 In general, lighter crude commands a higher price because it contains more hydrocarbon chains that can be easily
refined to make gasoline and diesel, which are in high demand.
 The lower the sulfur content, the higher the price as well because low-sulfur, sweet crude requires less refining.
 Classification of petroleum also indicates the best use for a particular field of petroleum.
 One oil type is not necessarily “Better” than another, but rather the different types are useful in different applications.
 Light crude oil is preferable for refining into gasoline as it produces a far higher yield than heavy.
 In a similar fashion, sweet petroleum is often more desirable than sour petroleum as its use will cause far less impact
on the environment in the form of harmful emissions as it is burned.
 These basic classifications of petroleum are further enhanced by a full molecular description gained through a crude
oil assay analysis.
The petroleum industry generally classifies crude oil by:-
i) Its sulfur content.
ii) Its API gravity.
iii) The geographic location it is produced in (Benchmarks of Crude Oils).
2) THE CLASSIFICATION OF PETROLEUM

i) Sweet Crude Oil
The terms sweet and sour are a reference to the sulfur
content of crude oil. Early prospectors would taste oil to
determine its quality, with low sulfur oil actually tasting
sweet.
Crude is currently considered sweet if it contains less
than 0.5% sulfur.
Sweet crude is easier to refine and safer to extract and
transport than sour crude. Because sulfur is corrosive,
light crude also causes less damage to refineries and
thus results in lower maintenance costs over time. Due
to all these factors, sweet crude commands up to a $15
dollar premium per barrel over sour.
Sweet crude is easier to refine and safer to extract and
transport than sour crude. Because sulfur is corrosive,
light crude also causes less damage to refineries and
thus results in lower maintenance costs over time.
Sweet crude oil is more preferred by refineries as it
contains valuable chemicals which is needed to
produce the light distillates and high quality feed
stocks.
Sweet crude oil is more preferred by refineries as it
contains valuable chemicals which is needed to
produce the light distillates and high quality feed
stocks.
Major locations where sweet crude is found include the
Appalachian Basin in Eastern North America, Western
Texas, the Bakken Formation of North Dakota and
Saskatchewan, the North Sea of Europe, North Africa,
Australia, and the Far East including Indonesia.
ii) Sour Crude Oil
 Sour crude oil will have greater than 0.5% sulfur and some of this will be
in the form of hydrogen sulfide. Sour crude also contains more carbon
dioxide. Most sulfur in crude is actually bonded to carbon atoms,
nevertheless, high quantities of hydrogen sulfide in sour crude can pose
serious health problems or even be fatal.
 Hydrogen sulfide is famous for its “rotten egg” smell, which is only
noticed at low concentrations. At moderate concentrations, hydrogen
sulfide can cause respiratory and nerve damage. At high concentrations,
it is instantly fatal. Exposure to high levels of hydrogen sulfide is thought
to be in part responsible for Gulf War Syndrome, which is characterized
by chronic fatigue, headaches, dizziness, memory problems, serious
breathing problems, and even birth defects. Hydrogen sulfide is so much
of a risk that sour crude has to be stabilized via removal of hydrogen
sulfide before it can be transported by oil tankers.
 Sour crude is sold at a discount to lighter sweeter grades. Because the
sulfur compounds in the crude oils are generally harmful impurities,
they are toxic, have an unpleasant odour, contribute to the deposition
of resin and in combination with water causes intense corrosion. Even
though it does not restrains the production of inconvenient crude and
the data shows that from 1995 to 2011 medium sour and sour crude has
been the major hydrocarbon produced in the world taking about 55 to
60% of whole crude production.
 Sour crude is more common in the North America (Alberta (Canada),
United States' portion of the Gulf of Mexico, and Mexico), South
America (Venezuela, Colombia, and Ecuador), Middle East (Saudi Arabia,
Iraq, Kuwait, Iran, Syria, and Egypt). Crude produced by OPEC Member
Nations also tends to be relatively sour, with an average sulfur content
of 1.77%.
a) Sulfur content of Crude Oil:-
Depending on the amount of sulfur the crude oil is referred to as sweet or sour.
Low sulphur (<0.5% weight) is called sweet .
High sulphur (>1% weight) is called sour.
 Sweet oil commands a higher price than Sour oil because it has fewer environmental problems and
requires less refining to meet sulfur standards.

b) API (American Petroleum Institute) Gravity:
A specific gravity scale developed by the American Petroleum Institute (API) for measuring the
relative density of various petroleum liquids, expressed in degrees.
 The specific gravity or relative density, which is equal to the density of the substance divided by the
density of water (density of water is 1000 kg/m3).
 So if the API gravity is greater than 10, then the oil is lighter and floats on water, and if less than
10, then oil is heavier than water and will sinks.
It is given by:-
API Gravity (°) = (141.5 ÷ specific gravity of the oil at 60ºF (15.6ºC)) − 131
 Most of API gravity crude oil values would fall between 10° and 70° API gravity .
 Crude oil quality is measured in terms of density and divided into four groups namely,: light, medium,
heavy and extra heavy crudes (Figures 1& 2).
 Crude oil may be considered:
Light if it has low density (or high API Gravity) or
Heavy if it has high density (or low API Gravity).
 Gravity reflects the composition of the crude: proportion of light vs. heavier fractions.
 Light crude oil is more desirable than heavy oil since it produces a higher yield of gasoline.
 Density of oil is determined by the length of the hydrocarbons it contains.
 If it contains a great deal of long-chain hydrocarbons, the petroleum will be denser.
 If it contains a greater proportion of short-chain hydrocarbons it will be less dense.
 Besides chain length, the ratio of carbon to hydrogen also helps to determine the density of a
particular hydrocarbon.
 The greater the amount of hydrogen in relation to carbon, the lighter the hydrocarbon will be.
 Less dense oil will float on top of denser oil and is generally easier to pump.

Figure 1 Classification of petroleum, heavy oil, and bitumen by API gravity and viscosity (Speight, 2007)
Depending on API
gravity crude oils
are classified as
follows:

3) DIFFERENT CRUDE OIL QUALITIES
Crude Oil Class
Property Range
Gravity (ºAPI) Sulfur (wt. %)
Ultra Light >50 <0.1
Light & Sweet 35-50 <0.5
Light & Medium Sour 35-50 0.5-1
Light & Sour 35-50 >1
Medium & Sweet 26-35 <0.5
Medium & Medium Sour 26-35 0.5-1
Medium & Sour 26-35 >1
Heavy & Sweet 10-26 <0.5
Heavy & Medium Sour 10-26 0.5-1
Heavy & Sour 10-26 >1
Table 1 Quality levels - API gravity and sulfur content (Eni, 2012)
 Crude oil comes in very different qualities
 The two key measures are:
Gravity (API)
Sulphur content
Gravity reflects the composition of the crude: proportion of light vs. heavier fractions

4) THE PRIMARY TYPES OF CRUDE OIL
The four primary types of oil are:
(1) The Very Light Oils / Light Distillates which include: Jet Fuel, Gasoline, Kerosene, Light Virgin Naphtha, Heavy
Virgin Naphtha, Petroleum Ether, Petroleum Spirit, and Petroleum Naphtha. These oils tend to be highly volatile and
can evaporate within just a couple of days, which quickly diffuses and decreases toxicity levels.
(2) Light Oils / Middle Distillates which include: Most Grade 1 and Grade 2 Fuel Oils and Diesel Fuel Oils as well as
Most Domestic Fuels and Light Crude Marine Gas Oils. These oils are moderately volatile, less evaporative and
moderately toxic.
(3) Medium Oils: Most of the crude oil on the market these days falls into this particular category. Low volatility makes for
messier & more complex “clean ups” and when it comes to the increased toxicity levels, I believe we have all lived
long enough to see what “Medium Oil” spills can do to the local ocean life out on the seas or local wildlife right here on
“terra firma!”
(4) Heavy Fuel Oils which include the heavy crude oils, Grade 3,4,5 and 6 Fuel Oils (Bunker B & C) as well as
Intermediate and Heavy Marine Fuels. With these oils there is very slow and little evaporation and therefore toxicity is
highly increased. This not only means potentially severe contamination for fish, fowl and fur-bearing creatures, but
possible “long term” contamination of water and soil as well.

5) GEOGRAPHIC LOCATION (or BENCHMARKS OF CRUDE OILS)
 The general concept of benchmarking is to classify crude oil based on its quality.
 The introduction of grading has become necessary due to the different composition of
oil as sulfur content, alkane content and the presence of impurities, in addition to where
it is located.
 For the convenience of trade market and to keep the balance between supply and
demand typical benchmarks were created.
 Prices for other crudes are determined by the differentials to benchmarks.
 Crude oil benchmarks, also known as oil markers, were first introduced in the mid
1980s.
 The petroleum industry generally classifies crude oil by the geographic location it is
produced in (e.g. West Texas Intermediate, Brent, or Oman), its API gravity (an oil
industry measure of density), and by its sulfur content (Figures 3 and 4).
 The geographic location is important because it affects transportation costs to the
refinery.
 Benchmark oils are used as references when pricing oils.
 Barrels from an area in which the crude oil's molecular characteristics have been
determined and the oil has been classified are used as pricing references throughout
the world.

6) TYPES OF BENCHMARKS OF CRUDE OILS
The Energy Intelligence Group has identifies 161 different blends in total traded on the market theses
days,
They are classified by geography
There are three different types of benchmarks,namely:
 North America's West Texas Intermediate crude (WTI) {light (WTI) },
 North Sea Brent Crude (Brent Blend), and
 OPEC basket used by OPEC (ORB)
Other well-known blends include :
 Dubai and Oman or {Oman (sour)}.
 Tapis Crude (which is traded in Singapore),
 Bonny Light (used in Nigeria),
 Mexico's Isthmus, and
 Maya.
 Note: There are approximately 161 different benchmark oils (or Blends), of which the main three West
Texas Intermediate, Brent Crude, and Dubai Crude (Figures 1 and 2).
Their pricing is used as a barometer for the entire petroleum industry, although, in total, there
are 46 key oil exporting countries (Figure 2).
Benchmarks are used because there are many different varieties and grades of crude oil.
Using benchmarks makes referencing types of oil easier for sellers and buyers
WTI and Brent futures prices are used for exports to the Atlantic Basin.

Figure 1 : Relationship between density and sulfur content of various Crude Oil
Benchmarks quality types (OPEC, 2011)
Crude Oil quality by types
Cheap
Expensive

Figure 2: Density and Sulfur contents of selected crude oils
Sulfurcontent(in%)
Sweet
Expensive
Cheap

Crude Oil quality by types

 is an extremely high quality crude oil which is greatly valued for the fact that it is of such
premium quality, more and better gasoline can be refined from a single barrel than from most
other types of oil available on the market.
 is probably the most famous of the benchmark oils.
 is used primarily in the U.S, Western Hemisphere. It comes from the Southwestern United
States.
 This is the most common type of crude oil, which is trading in oil futures pit at the
New York Mercantile Exchange (NYME).
 is a very sweet high quality oil : It is a light (about 39.6° API gravity) and sweet (low-sulfur
about 0.24 %.).
 That gives it a specific gravity of 0.827, which means that at 60 degrees Fahrenheit, WTI is
only 8/10 as heavy as water. It contains 0.24% sulfur and is refined in the Midwest.
 Thus making it ideal for producing products like low-sulfur gasoline and low-sulfur diesel.
 It is mostly used to produce gasoline and therefore that type of oil is in high demand,
especially in the United States and China (UP Trading, 2012).
 Brent is not as light or as sweet as WTI but it is still a high-grade crude.
 The OPEC basket is slightly heavier and more sour than Brent.
 As a result of these gravity and sulfur differences, WTI typically trades at a dollar or two
premium to Brent and another dollar or two premium to the OPEC basket.
 These combined qualities as well as location make WTI a prime crude oil to be refined in the
United States, which is by far, the largest gasoline consuming country on the planet. The vast
majority of WTI crude oils are refined in the Midwest and Gulf Coast regions. Even with
production of WTI crude oil in decline, WTI is often priced from $5 to $7 higher per barrel
than “OPEC Basket” oil and on average, $1 to $2 higher per barrel than “Brent Blend” oils.
a) West Texas Intermediate (WTI)

Brent Crude, named after a goose, comes from the North Sea.
The sulfur content is 0.37%.
Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases
of oil worldwide.
 It is a light, sweet crude with an API gravity of 38.06 and a specific gravity of 0.835, , but clearly not quite as
“light” as WTI (i.e. API is making it slightly “heavier” than WTI).
 It also contains about 0.37 percent sulfur, which makes it a “sweet” crude oil, but then again, not quite as “sweet”
than WTI.
 This grade is described as light because of its relatively low density, and sweet because of its low sulfur content
(0.37% ).
 Brent crude oil is light and is ideal for the production of gasoline.
It is mostly refined in Northwest Europe and is also called Brent Blend, London Brent, and Brent petroleum.
Brent Blend is actually a combination of different oils from 15 fields throughout the Scottish Brent and Ninian systems
located in the North Sea. The Brent field is located in the East Shetland Basin, halfway between Scotland and Norway
Brent Crude is extracted from the North Sea and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes
(also known as the BFOE Quotation). This mechanism gives Dated Brent a robust supply of approximately 1.4 mb/d of
production, which provides the price benchmark with a sustainable volume of tradable crude oil for its own protection from
undue market influence.
Brent Blend is quite excellent for making gasoline and middle distillates, both of which are utilized in large quantities in
Northwest Europe, where Brent blend crude oil is most often refined.
Brent Blend production, much like that of WTI, is also on the decline, but it remains a major benchmark for other crude
oils in Europe or Africa.
A “futures” market – based at the International Petroleum Exchange (IPE) in London
The price of Brent Crude is used to set prices for roughly 2/3 of the world’s oil.
The oil price of Brent is in the basis for the pricing of about 40% of world oil prices from 1971.
Brent Crude is typically priced at about $2 dollars over the WTI Spot price, which is typically priced $5 to $6 dollars
above the EIA's Imported Refiner Acquisition Cost (IRAC) and OPEC Basket prices.
b) Brent Blend

Dated Brent
 Platts Dated Brent is the recognized benchmark price assessment of the price (or spot market value) of physical
cargoes of North Sea light sweet crude oil.
 As a consistent underlying price it supports a broad range of derivative instruments accessible via futures exchanges
and in over-the-counter markets worldwide.
 Dated Brent and its derivatives are used by active market participants to hedge their daily, short-term and long-term
market price risk for crude oil, as well as for correlated refined oil products, natural gas, gas liquids and condensates.
 The term ‘Dated’ refers to the physical cargo price for North Sea Brent light crude which has been allocated a specific
forward loading date. North Sea light sweet crude oil grades Forties, Oseberg and Ekofisk are also deliverable into the
Dated Brent contract, under a mechanism known as alternative delivery.
 The term "Dated Brent" refers to physical cargoes of crude oil in the North Sea that have been assigned specific
delivery dates.
 Each dated cargo of crude oil is often traded more than once as it makes its way to delivery to refineries -- where
crude is transformed into products like gasoline, diesel, jet fuel, and more.
 Dated Brent is a critical component of the Brent Complex, which includes the trading of physically delivered oil like
Dated Brent and cash BFOE (Brent-Forties-Oseberg-Ekofisk), as well as financially settled derivatives like Brent
Futures, Contracts for Differences (CfDs), Dated-to-Frontlines (DFLs) and a variety of other derivatives.
 Price indicators from the Brent Complex are increasingly used as a reference for measuring the value of crude oils all
around the world, and often of global economic health itself.
 Dated Brent is the true, recognized barometer of global sweet crude oil economics.
 For this reason it is widely used as a key macro indicator for global economic growth.
 As the most broadly accepted global crude oil benchmark, Dated Brent always faces intense scrutiny from producers,
end-users, traders, governments and financial market regulators who are all keen that this published benchmark price
fully converges with market price. In light of this responsibility, Platts continues to devote watchful attention and
thought leadership to maintain and evolve the systems supporting the price assessment of the Dated Brent
benchmark.
 At the same time that other traditional sweet crude benchmarks used in the US and Asia are declining in accuracy and
usefulness, Platts Dated Brent is growing in its breadth and depth of contractual usage around the world.
 Dated Brent is increasingly being used to determine the value of sweet crude in the North Sea, West Africa, the
Mediterranean, South and Latin America, Canada and North America, Central Asia and in Russia. More than 60% of
the world’s internationally traded crude oil is priced against Dated Brent.

c) OPEC Reference Basket (ORB) or OPEC Basket (ORB):
used by OPEC (Organization of Petroleum Exporting Countries)
The OPEC Reference Basket (ORB), also referred to as the OPEC Basket is a
weighted average of prices for petroleum blends produced by OPEC countries.
It is used as an important benchmark for crude oil prices.
OPEC Basket is the pricing data formed by collecting seven crude oils from the
OPEC nations (except Mexico).
An average that is determined by the production and exports of each oil producing
country. This reference is typically used as a reference point in monitoring the
market conditions of oil throughout the world. This weighted average collects oil
prices from a number of oil producing countries.
OPEC attempts to keep the price of the OPEC Basket between upper and lower
limits, by increasing and decreasing production. This makes the measure important
for market analysts. The OPEC Basket, including a mix of light and heavy crudes, is
heavier than both Brent crude oil, and West Texas Intermediate crude oil.
This information is used by OPEC to monitor the global conditions of the oil market.

Organization of Petroleum Exporting Countries (OPEC)
 The acronym OPEC stands for “Organization of Petroleum-Exporting Countries” which is an organization that was
formed in 1960 in order to create some common policy for the production and sale of oil within its jurisdiction.
 OPEC is a group of 13 countries that produce 36% of the world’s oil, or 32 million barrels of oil per day.
 The largest producers in OPEC are four Arab states, namely Saudi Arabia, Iran, the United Arab Emirates, and Kuwait,
although Venezuela is also a major producer.
 So, if oil and gas is of such importance to society, it’s important to understand who controls its production. Today, oil
production is governed by three major groups who together produce 75% of the global supply.
 Original Member Countries:
 Iran
 Iraq
 Kuwait
 Saudi Arabia
 Venezuela
 Other members Qatar, Indonesia, Socialist Peoples Libya, United Arab Emirates, Algeria, Nigeria, Ecuador, Angola,
Gabon
 Objective statement: OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in
order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of
petroleum to consuming nations; and a fair return on capital to those investing in the industry.
 The Main Producers: OPEC …. OPEC currently accounts for 81% of total world oil reserves.
 Total reserves in many OPEC countries hardly changed in the 1990s.
 Official reserves in Kuwait, for example, were unchanged at 96.5Gbbl (15.34×109 m3) (including its share of
the Neutral Zone) from 1991 to 2002, even though the country produced more than 8Gbbl (1.3×109 m3) and
did not make any important new discoveries during that period.
 The case of Saudi Arabia is also striking, with proven reserves estimated at between 260 and 264 billion
barrels (4.20×1010 m3) in the past 18 years, a variation of less than 2%,while extracting 60 billion barrels
(9.5×109 m3) during this period.
 In 1985–1986, the UAE almost tripled its reserves from 33Gbbl (5.2×109 m3) to 97Gbbl (15.4×109 m3).
 In 2001–2002, Iran raised its proven reserves by some 30% to 130Gbbl (21×109m3), which advanced it to
second place in reserves and ahead of Iraq.

The new OPEC Reference Basket (ORB):
 OPEC Basket oil is a collective thirteen different crude oils from :
1) Saharan Blend (Algeria)
2) Girassol (Angola)
3) Oriente (Ecuador)
4) Minas (Indonesia)
5) Iran Heavy (Islamic Republic of Iran)
6) Basra Light (Iraq)
7) Kuwait Export (Kuwait)
8) Es Sider (Libya)
9) Bonny Light (Nigeria)
10) Qatar Marine (Qatar)
11) Arab Light (Saudi Arabia)
12) Murban (UAE)
13) BCF 17 (Tia Juana Light ; from Venezuela)
 This is not a specific crude, but rather is a weighted average of petroleum that comes from OPEC
countries.
 It was recently changed to reflect the average quality of crude oil in OPEC Member Countries.
 There are currently 11 different oils combined into the ORB.
 It averages an API gravity, with the present combination, of 32.7 degrees and has a sulfur content of
1.77%.
 The change decreased the API and increased the sulfur content of the basket.
 Because OPEC oil has a much higher percentage of sulfur within its natural make-up and therefore is not nearly as
“sweet” as WTI or even Brent Blend and since it is also not naturally as “light” as well, the prices of OPEC oil are
normally consistently lower than either Brent Blend or WTI. However, OPEC’s willingness or ability to quickly
increase production when necessary makes OPEC a consistent “Major Player” in the oil industry!

d) Dubai and Oman Crude {Oman (sour)}:
 Dubai Crude is light and sour, with an API gravity of 31° and a specific gravity of
0.871.
 Its sulfur content is 2%, making it 6 times more sour than Brent Crude and 8 times
more sour than WTI.
 It is extracted from Dubaiand surroundings. The extraction site is important because it
affects the cost of transport to the refinery.
 It is generally used for pricing oil that comes from the Persian Gulf.
 Dubai Crude is also known as Fateh is produced in the Emirate of Dubai, only
refinery, at Jebel Ali, takes condensates as feed-stocks, and therefore all of
Dubai's crude production is exported.
 Its importance comes not only from its quality, but also from the fact that it was the
only freely traded oil from the Middle East until recently.
 For many years it was the only freely traded oil in the Middle East, but gradually a
spot market has developed in Omani crude as well.

e) Bonny Light
 Bonny light comes from Nigeria and is a light, sweet oil. It has an
API gravity of 32.9o (low specific gravity) and a sulfur content of
0.16%
 Bonny Light oil is a high grade of Nigerian crude oil with high API
gravity of around 32.9o (low specific gravity), produced in the Niger
Delta basin and named after the prolific region around the city of
Bonny.
 The very low sulfur content (0.16%) of Bonny Light crude makes it a
highly desired grade for its low corrosiveness to refinery
infrastructure and the lower environmental impact of its by-products
in refinery effluent.
 The Bonny Light is in high demand specifically by American and
European refineries.

f) Tapis crude :
 Tapis crude is a Malaysian crude oil used as a pricing benchmark in
Singapore.
 Tapis is often referred to as the “World’s Costliest Oil” and comes from a
single field in Malaysia.
 It is often used as an oil marker for Asia and Australia.
 Tapis is very light with an API gravity of 45.2° and very sweet with only
about 0.034% sulfur.
 Its value comes from the fact that WTI and Brent Crude are difficult and
expensive to export to Asia and because it is of extremely high quality.
 The price of Tapis in Singapore is often considerably higher than the price of
benchmark crude oils such as Brent or WTI (those commonly referenced in
market commentaries). This is because it's greater aromaticity (i.e.
higher ° API) allows for greater production of higher-value products
(such as gasoline) from Tapis than Brent or WTI.

g) Mexico's Isthmus (or Isthmus-34 Light)
 This is a sour crude with and API gravity of 33.74 degrees and a
sulfur content of 1.45%.
 It is produced in Mexico mainly in the Campeche zone, in the Gulf
of Mexico along with the extraction centers in Chiapas, Tabasco,
and Veracruz.
 The name derives from the nearby Isthmus of Tehuantepec and
the oil is a component of the OPEC Reference Basket (despite
the fact that Mexico is not a part of OPEC).
Though Mexico is not a part of OPEC, this oil was once part of
the OPEC Reference Basket. It was removed in from the ORB
when it was changed in 2005.

h) Maya
 Maya is a heavy sour crude oil with an API specific gravity between 21 and
22 degrees and a sulfur content of 3.4%, meaning only the most
sophisticated refineries are capable of profitably processing it.
 Maya is a blend of crude oils from the Cantarell and Ku Maloob Zaap oil
fields southeast Mexico.
 Overseas sales will fall by at least 110,000 bpd in 2011 due to the
expansion of Mexico's Minatitlan refinery. Valero (444,000 bpd), ExxonMobil
(145,000 bpd), and Chevron (102,000 bpd) were the top Maya non-Pemex
affiliated Maya buyers in October 2010, according to the U.S. government.
 The Shell-Pemex Deer Park joint venture refinery near Houston processed
243,000 bpd of Maya in October while Mexican refineries averaged 453,000
bpd processed in the first 11 months of 2010.

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Lecture 1 Crude Oil Quality

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