The physical characteristics of crude oils differ. Crude oil with
a similar mix of physical and chemical characteristics, usually produced from a
given reservoir, field or sometimes even a region, constitutes a crude oil
"stream." Most simply, crude oils are classified by their density
and sulfur content. Less dense (or "lighter") crudes generally have a
higher share of light hydrocarbons -- higher value products -- that can be
recovered with simple distillation. The denser ("heavier") crude oils
produce a greater share of lower-valued products with simple distillation and
require additional processing to produce the desired range of products.
Some crude oils also have a higher sulfur content, an undesirable characteristic
with respect to both processing and product quality. For pricing purposes,
crude oils of similar quality are often compared to a single representative
crude oil, a "benchmark," of the quality class.
The quality of the crude oil dictates the level of processing and
re-processing necessary to achieve the optimal mix of product output.
Hence, price and price differentials between crude oils also reflect the
relative ease of refining. A premium crude oil like West Texas
Intermediate, the
In addition to gravity and sulfur content, the type of hydrocarbon
molecules and other natural characteristics may affect the cost of processing or
restrict a crude oil's suitability for specific uses. The presence of
heavy metals, contaminants for the processing and for the finished product, is
one example. The molecular structure of a crude oil also dictates whether
a crude stream can be used for the manufacture of specialty products, such as
lubricating oils or petrochemical feedstocks.
Refiners therefore strive to run the optimal mix (or "slate") of crudes
through their refineries, depending on the refinery's equipment, the desired
output mix, and the relative price of available crudes. In recent years,
refiners have confronted two opposite forces -- consumers' and government
mandates that increasingly required light products of higher quality (the most
difficult to produce) and crude oil supply that was increasingly heavier, with
higher sulfur content (the most difficult to refine).