Each crude oil produced is a unique combination of hundreds of chemicals and metals. Considering the wide variation in the qualities of crude oil, it is amazing that the refining industry is so efficient at making a few standard fuels that are of consistent enough quality to allow the design and operation of fuel consuming machines.

To avoid having thousands of barrels of unwanted oil around, the refiners must continually balance the production of products in such a way that virtually all of each barrel of crude oil is used in some manner. They do this by dividing the oil into several subportions based on boiling points (the temperature at which the liquid begins to boil). Other than for the production of specific chemical plant feedstocks and for environmental monitoring, the refiner does not concern himself much with the exact chemicals in his products. As a result, every refined product is slightly different in chemical makeup than the next - each batch of product made has a unique fingerprint. As a result, crude oils are marketed based on their assay, which is simply a summary of the percent volume of the crude that falls into each of several boiling point ranges. The boiling point ranges roughly define naphtha (gasoline), distillate, and residual oil.

Refineries are designed and operated based on the quality of a crude oil. In the beginning of oil refining a refinery was designed to process a specific crude oil, or specific combination of crude oils -- what ever was produced closest to the refinery. Over the years, as local production played out, refiners had to bring in new crude oils from other sources -- nationally first, then from international sources. On of the main reasons the U.S. was caught short by OPEC in the 1970's was simply because our refineries depended on imported light (34+), sweet (low sulfur) crudes. And at the time, the unlimited source was from OPEC countries. So when OPEC cut off the flow of oil, U.S. refiners had no real alternatives. Although there was heavy, high sulfur oil available from various other sources, our refineries could not process those crudes.

Times have changed. In the 1980's refineries were modified to allow the use of a wider range of crude oil and they began to import a wider range of crude oils, which opened up the market to many new producers. Now, refiners can accomodate the heavier crude oils, but when supply is plentiful, they will always prefer the light, sweet crude. Refining light, sweet crude oil is requires less processing to make gasoline and distillate and results in lower air emissions per barrel refined. So a refiner can actually operate at a higher feed rate under the same permit. The value in the lighter crude oil translates to a higher bid price for light, sweet crude oil. The variation in prices for crude oil is a function of supply and demand for similar crudes. The industry generally uses API gravity and % sulfur as the two primary guiding parameters to indicate crude oil quality. Of course, crude oil buyers discriminate further to make sure their refinery can actually run a specific crude oil. But, in general, they talk in terms of API and sulfur. The higher the API, the lighter the crude, i.e. the more gasoline it contains.

The Energy Information Administration (EIA) reports the following list of recent trade prices for various world crude oils. (Table 12 in the Weekly Petroleum Status Report). The prices are in U.S. Dollars per Barrel - estimated contract prices based on government - selling prices, netback values, or spot market quotations. All prices are f.o.b. at the foreign port of lading. (See the EIA WPSR for further notes.)