Crude Oil WTI

Pricing of crude oil depends on several factors, including demand, supply and quality of crude oil. Two of the most important quality parameters of crude oil are its specific gravity and sulphur content. Specific gravity is relative density with respect to water. Low density and low-sulphur content crude oil fetches higher prices in the market. Higher sulphur content increases the risk of corrosion of the piping and equipment through which it is passed during the refining process.

Brent and WTI(West Texas Intermediate) crude oil are used as benchmarks to rate the quality of crude oil produced from other countries or regions and are priced accordingly. Brent and WTI crude oil have a sulphur content of less than 0.5% and API (American Petroleum Institute) gravity of less than 40.

API Gravity = 141.5/ (S.G at 600)– 131.5

S.G is the specific gravity of crude oil

The oil produced in any region is priced according to its API gravity and sulphur content with respect to benchmark crude oil.

Brent and WTI crude oil are used as benchmarks to rate the quality of crude oil produced from other countries or regions and are priced accordingly. Brent and WTI crude oil have a sulphur content of less than 0.5% and API (American Petroleum Institute) gravity of less than 40.

API Gravity = 141.5/ (S.G at 600)– 131.5

S.G is the specific gravity of crude oil

The oil produced in any region is priced according to its API gravity and sulphur content with respect to benchmark crude oil.

Oil prices are driven by the demand and supply variables in the market. Traders go for future contracts to hedge their crude oil purchases/investments. Oil futures are derivative instruments that can be traded on exchanges and are often used by traders and oil companies to keep them safe from a sudden spike in prices.

Crude oil is traded in physical quantities in the ‘spot market’ in near-term delivery contracts. The prices in the spot market are highly volatile as they are traded for a short term. In the spot market, mostly refiners and traders who deal in crude oil trade as they can take the physical delivery.

The payment terms and prices depend on the factors such as currency and relationships between countries. The countries which are in good books fetch favourable prices of their crude oil than the countries whose assets are under the control of extremists.

1. Paint industry – petroleum and its derivatives are used as raw materials for the industry.

2. Tyres - petroleum and its derivatives are used as raw materials in the manufacturing of tyres.

3. Aviation industry – Costlier crude oil will lead to price rise in jet fuels.

4. Auto – Higher fuel prices may negatively impact the sales.

5. Cement industry- Uses petroleum products in very little quantity, however, the cost of shipping the final products is heavily influenced by the crude oil prices.

The United States of America remained the largest crude oil producer in 2025, producing around 13.58 million barrels per day on average. Russia ranked second with approximately 9.87 million barrels per day, followed by Saudi Arabia at about 9.51 million barrels per day. Other major producers include Canada, Iraq, China, and Iran, each contributing over 4 million barrels per day.

When it comes to reserves, Venezuela continues to hold the world's largest proven crude oil reserves, accounting for a significant share of global reserves.