Our crude oil market insights deliver the critical information needed to stay on top of ever-changing developments across global oil markets for more secure trading and forecasting.
Crude oil is pumped in the Middle East and Asia then pumped into tankers ships and sailed across the ocean to oil refineries on the Delaware River. The complex refining process of manufacturers finishes petroleum products out of crude oil. While refining begins as simple distillation by heating and separating, refiners must use more sophisticated additional techniques, and equipment to produce the mix of products that the market demands. Generally, this last effort minimizes the production of heavier, lower-value products as residual fuel oil, used to power large ocean-going ships in favor of middle distillates such as jet fuel, kerosene, home heating oil, and diesel fuel and lighter, higher-value products like liquid petroleum gases (LPG), naphtha, and gasoline.
Light Crude Oil
Light crude oil is liquid petroleum with a low density and flows freely at room temperature. It has a low viscosity, low specific gravity, and high API gravity due to, the presence of a high proportion of light hydrocarbon fractions. It generally has a low wax content. Light crude oil receives a higher price than heavy crude oil on commodity markets because it produces a higher percentage of gasoline and diesel fuel when converted into products by an oil refinery.
Light crude is composed of a high number of paraffin, which is a straight and branched chain hydrocarbon and have a high hydrogen-to-carbon ratio. Essentially, they have two hydrogen atoms for every carbon atom they contain. Because hydrogen weighs roughly 12 times less than carbon, paraffin is lighter and less dense than hydrocarbons, with a lower hydrogen-to-carbon ratio. The best light crudes contain roughly, 60% paraffin.
Heavy Crude Oil
Heavy crude oil or extra heavy crude oil is an oil with, highly viscous and cannot easily flow to production wells under normal reservoir conditions. It is referred to as “heavy” because its density or specific gravity is higher than that of light crude oil. Heavy crude oil has been defined, as any liquid petroleum with an API gravity of less than 20°.
Physical properties that differ between heavy crude oils and lighter grades include higher viscosity and, specific gravity, as well as, heavier molecular composition. In 2010, the World Energy Council defined extra heavy oil as crude oil having a gravity of less than 10° and a reservoir viscosity of no more than 10 000 centipoises. When reservoir viscosity measurements are not available, extra-heavy oil is considered by the WEC to have a lower limit of 4° °API. Heavy oils and asphalt are dense no-aqueous phase liquids (DNAPLs). They have “low solubility and are with a viscosity lower and density higher than water. Large spills of DNAPL will quickly penetrate the full depth of the aquifer and accumulate on its bottom.
Heavy crude oil is closely related to natural bitumen from oil sands. Petroleum geologists categorize bitumen from oil sands as ‘extra-heavy oil’ due to its density of less than 10° °API. Bitumen is the heaviest, thickest form of petroleum
Most heavy oil is found at the margins of geologic basins and is thought to be the residue of formerly light oil that has lost its light-molecular-weight components through degradation by bacteria, water washing, and evaporation. Conventional heavy oil and bitumen differ in the degree to which they have been degraded from the original crude oil by bacteria and erosion. Often, bitumen is more viscous than cold molasses and does not flow at ambient conditions.
According to World Resources Institute, concentrations of remarkable quantities of heavy oil and oil sands are found, in Canada and Venezuela. The U.S. Energy Information Administration (EIA) reported in 2001 that the largest reserves of heavy crude oil in the world were located north of the Orinoco river 270-mile long by 40-mile wide Orinoco Belt in eastern Venezuela. At that time, Venezuela began authorizing “joint ventures to upgrade the extra-heavy crude resources.” Petroleos de Venezuela, S.A. at that time estimated that there were 270 billion barrels of recoverable reserves in the area, the same amount as the conventional oil reserves of Saudi Arabia. The Orinoco Belt in Venezuela is described, as oil sands, but these deposits are non-bituminous, falling instead into the category of heavy or extra-heavy oil due to their lower viscosity. Natural bitumen and extra-heavy oil differ in the degree to which they have been degraded from the original conventional oils by bacteria. According to the WEC, extra-heavy oil has “a gravity of less than 10-API and a reservoir viscosity of no more than 10,000 centipoises thirty, or more countries are known to have reserves.
Production, transportation, and refining of heavy crude oil present specific challenges compared to light crude oil. Generally, a diluent is added at regular distances in a pipeline carrying heavy crude to facilitate its flow. Dilbit (diluted bitumen) is a means of transporting highly viscous hydrocarbon. Per the Alberta Oil Sands Bitumen Valuation Methodology, “Dilbit Blends” means “Blends made from heavy crudes or bitumen and a diluent usually condensate, to meet pipeline viscosity and density specifications, where the density of the diluent included in the blend is less than 800 kg/m3.
