Crude Oil

Depending upon the characteristics of the crude stream, it may also include

1. Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric pressure after being recovered from oil well (casing head) gas in lease separators and are subsequently comingled with the crude stream without being separately measured. Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream is also included;

2. Small amounts of nonhydrocarbons produced with the oil, such as sulfur and various metals;

3. Drip gases, and liquid hydrocarbons produced from tar sands, oil sands, gilsonite, and oil shale.

Light oil requires less processing and produces a greater percentage of gasoline and diesel than heavy oil.

The standard unit of measurement for oil weight is API Gravity. This scale was created by the American Petroleum Institute to measure the density of oil. Below are some visual examples of heavy oil and light oil.

Companies use a test called an assay to get a full chemical breakdown of what is in a barrel of oil. The ideal oil is light and sweet with a low TAN count, while the harder to process oil is heavy and sour with a high TAN count.

Heavy oil evaporates slowly and contains material that will be used to make heavy products like asphalt.

What makes a particular crude sweet or sour is the amount of sulfur it contains. Sweet crude has very low levels of sulfur, well under 1%. Sour crude has as much as 1-2% of sulfur.

Midstream companies and refiners that transport, store, and process sour oil know they need extra treating capabilities to take out the sulfur and sweeten the product.

TAN stands for “Total Acid Number.” The TAN count of oil is a measure of how corrosive it is.

If a crude has a high TAN number, producers must use more robust metallurgy than standard so their processes can handle that corrosivity and keep the crude in the pipe.

Companies use a test called an assay to get a full chemical breakdown of what is in a barrel of oil. The ideal oil is light and sweet with a low TAN count, while the harder to process oil is heavy and sour with a high TAN count.

These oils are typically labeled by the region they come from, and they have a specific chemical makeup.

The three most well known regional benchmark oils are WTI, Brent, and OPEC.

WTI stands for West Texas Intermediate. This is oil produced in the United States. It is typically on the lighter end of the spectrum, at an API gravity of 39.6. WTI sulfur content is 0.24%, putting it at the sweeter end of the spectrum.

Brent oil comes from the Scottish Brent and Ninian Systems located in the North Sea. This oil is also light and sweet, with an API gravity of 38.3. Brent sulfur content is 0.37%.

OPEC stands for “Organization of Petroleum Exporting Countries.” It is a collective group of seven different crude oils from Algeria, Saudi Arabia, Nigeria, Dubai, Indonesia, Venezuela, and the Mexican Isthmus. The oil from these regions is typically on the heavier and sour end of the spectrum.

While logistics also play a role, typically the lighter and sweeter an oil is, the more expensive it’s going to be.