Oil and Gas: Companies, Crude Grades and Markets

How crude grades differ: API gravity and sulfur

Crude oil isn’t one product. Each field produces oil with its own chemistry, and two measurements do most of the work in describing it. API gravity measures density: the higher the number, the lighter the oil. Light crudes yield more gasoline, diesel and jet fuel from simple refining. Sulfur content splits crudes into sweet (low sulfur) and sour (higher sulfur). Sour crude needs more treatment to meet fuel sulfur limits.

Our articles on Murban crude and Arab Light and API gravity go further into individual grades.

Benchmarks and why prices differ by grade

Most of the world’s crude is priced as a differential to a handful of benchmarks. Brent futures on ICE are the main global reference, WTI futures on NYMEX are the US reference, and Dubai and Oman prices are used for Middle Eastern crude sold to Asia. Murban has had its own futures contract on ICE Futures Abu Dhabi since 2021. A light sweet grade usually sells at a premium to a heavy sour one, because it costs less to refine. How big that gap is depends on refinery capacity, freight and how much of each type is on the market at the time. Our piece on Brent and other crude types explains the refining side.

How OPEC oil production is set

OPEC was founded in Baghdad in 1960 and is based in Vienna. Since 2016 its members have coordinated output with a group of other producers, including Russia, under an arrangement usually called OPEC+. Production targets are agreed at ministerial meetings, and some members add voluntary cuts on top. Actual output often differs from targets, which is why analysts watch the monthly figures closely.

For dated, authoritative numbers, the main sources are OPEC’s own Monthly Oil Market Report (which publishes member output from secondary sources), the US Energy Information Administration’s Short-Term Energy Outlook and the International Energy Agency’s Oil Market Report. Our article on OPEC oil production covers how output decisions reach diesel, fertilizer and freight costs.

ADNOC, Aramco and QatarEnergy

Most Gulf oil and gas is produced by national oil companies. The Abu Dhabi National Oil Company (ADNOC) was set up in 1971 and runs Abu Dhabi’s upstream fields, gas processing, refining and petrochemicals, with several subsidiaries listed on the Abu Dhabi Securities Exchange. Its Habshan to Fujairah pipeline lets crude reach a port outside the Strait of Hormuz. Saudi Aramco is majority-owned by the Saudi state and has been listed in Riyadh since 2019. QatarEnergy, renamed from Qatar Petroleum in 2021, develops the North Field, the large offshore gas field Qatar shares with Iran. Our lists of oil and gas companies in the UAE and of Aramco’s assets cover the companies in more detail.

Wells, gas plants and refineries: the oil and gas value chain

The industry is usually split into three parts. Upstream covers exploration and production: finding fields, drilling wells and lifting oil and gas. Midstream covers pipelines, storage, gas processing plants that strip out liquids and impurities, and LNG plants that chill gas to a liquid for shipping. Downstream covers refineries, petrochemical plants and fuel distribution. A company’s results, and how sensitive they are to crude prices, depend heavily on where in this chain it earns its money.

Why oil and gas prices matter for farms and mines

Most readers of this hub don’t trade oil. They run farms, mines or businesses that buy fuel. Diesel powers tractors, haul trucks, generators and the trucks that move produce and ore, so its price feeds straight into operating costs. Natural gas is the main feedstock for ammonia, which makes nitrogen fertilizer prices track gas prices. Freight rates, plastics and many chemicals follow crude as well. That’s why our articles on crude oil prices for agriculture and mining look at what a price move means for input budgets, and why some larger operations hedge fuel or lock in supply contracts ahead of the season.

Reading oil prices and market data

Oil prices change every trading day, so any figure is only meaningful with a date and a source. The EIA publishes daily spot prices for Brent and WTI and weekly US inventory data, and the World Bank’s monthly commodity price data gives long historical series. Our hub articles cite dated figures; for example, our guide to Brent crude and mining costs uses EIA annual averages. The articles in this hub are for background reading on how the market works. They aren’t investment advice or trading recommendations.