The Classification of Petroleum

For several decades now the crude oil or petroleum industry has classified the raw product by the location it was extracted from the earth by geographic region. A further classification of petroleum is then added which is derived from the density of the raw petroleum (API gravity). It will then be further classified by the overall level of sulphur content. There are also four more general petroleum classifications that all raw petroleum will fall into. If the crude oil contains high levels of sulphur the petroleum classification is termed sour, if it has relatively low levels of sulphur the petroleum classification is termed sweet', if the raw petroleum is of a high density then the petroleum classification is termed heavy' and if it is of a low density the petroleum classification is termed light'.

When considering the petroleum classification it is important to consider the fact that the overall classification will have an effect on the value, not just the physical properties. For example, petroleum with a geographical classification from one region of the world may be expensive to transport to another region of the world regardless of the suitability of the raw petroleum as an overall substance. Classification of petroleum also indicates the best use for a particular field of petroleum. Light crude oil is preferable for refining into gasoline as it produces a far higher yield than heavy. In a similar fashion, sweet petroleum is often more desirable than sour petroleum as its use will cause far less impact on the environment in the form of harmful emissions as it is burned. These basic classification of petroleum are further enhanced by a full molecular description gained through a crude oil assay analysis. Once a raw crude oil or petroleum has been classified and further identified by its molecular properties then it can be priced effectively. There are many unique pricing references for different petroleum classifications although the most common of these are:

OPEC Reference basket This is a blended oil produced by mixing raw petroleum produced on a number of counties which are members of the Organisation of the Petroleum Exporting Countries). Minas This is a crude oil produced in Indonesia, and is most often used as a classification reference for all heavy Far East oils. Tapis This is a crude oil produced in Malaysia, and is most often used as a classification reference for all light Far East oils. Dubai Oman This is the yardstick used to classify the sour petroleum which is produced all of the Middle East in the Asia Pacific area. East Shetland Basin This is the main classification reference for all North Sea oil. Almost all oil produced from Europe, heading eastwards to the Middle East is priced using this reference. Brent Blend This classification reference only applies to the blended oil produced by mixing the 15 oils produced in the Ninian and Brent fields. West Texas Intermediate This is a prime light oil, very sweet that is produced in North America. The quantity of the original benchmark oils which are pumped each year is in steady decline; often the actual oil ordered will simply comply with the classification criteria for the original oil but will be pulled from a different field or region.