Benchmark (crude Oil)

Benchmark (crude Oil)

A benchmark crude or marker crude is a crude oil that serves as a reference point for the many other crudes available. There are three primary benchmarks, WTI, Brent Blend, and Dubai. Other well-known blends include the Opec basket used by OPEC, Tapis Crude which is traded in Singapore, Bonny Light used in Nigeria and Mexico's Isthmus. Energy Intelligence Group publishes a handbook which identified 195 major crude streams or blends in its 2011 edition.

Benchmarks are used because there are many different varieties and grades of crude oil. Using benchmarks makes referencing types of oil easier for sellers and buyers.

There is always a spread between WTI, Brent and other blends due to the transportation cost. For example if the US is the net consumer of Brent, WTI will be more expensive than Brent because it has to have the same price, if shipping is included.