Elements Influencing Crude Oil Pricing

The price of a barrel of oil varies based on its grade. The factors responsible for the fluctuation in crude oil pricing in India are discussed below:

• The specific gravity or API
• Sulphur content
• Location—for instance, its closeness to tidewater and/or refineries. Heavier, sour crude oils lacking in tidewater access—such as Western Canadian Select— are less expensive than lighter, sweeter oil—such as WTI.

Varieties of Crude Oil

While there are over 100 types of crude oil traded internationally, two of them are the most common:

1. West Texas Intermediate (WTI)
   • It is a high-quality crude and is excellent for refining for the maximization of Petrol.
   • It is a light crude with an API gravity of 39.6 degrees.
   • The presence of 0.24 percent of sulphur makes it a sweet crude.
2. Brent
   • It is a blend of crude oil from 15 different oil fields in the Brent and North Sea areas.
   • It is a reasonably "light" and sweet crude oil with an API gravity of 38.3 degrees.
   • Comprises 0.37 percent of sulphur.
   • It is ideal for making Motor Spirit (Petrol) and middle distillates.

Crude Oil Pricing in India

• India's domestic crude oil production in July 2019 was 2,769 thousand tonne (TMT), and in 2017, India had 600 million metric tonnes (MMT) of proven oil reserves.
• In 2020, crude oil pricing plummeted from an average of about $55 per barrel to $20 by the end of March due to the slumped demand during the COVID-19 pandemic.

Also, you can read Oil Price War & Implications: RSTV- Big Picture

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