Brent
Brent originated as the name of a specific type of crude oil or oil field in the North Sea. Over time, it was used for three interconnected concepts: Brent Crude Oil, Brent Oil Field, and the Brent Crude Oil benchmark.
Brent Crude Oil:
This is a specific blend of crude oil extracted from the North Sea. Its lightness and sweetness, attributed to its low sulfur content, make it ideal for refineries.
Brent Oil Field:
The Brent oil field is one of the largest fields in the North Sea. It has been the key to the United Kingdom(UK)’s success in the oil and gas industry since its discovery in the 1970s.
Brent Crude Oil Benchmark:
In the global oil market, a few types of oil are utilized as price reference points for buyers and sellers. They are known as oil benchmarks, or oil markers. The two dominating oil benchmarks are Brent and West Texas Intermediate (WTI).
Brent Crude Oil is used as the benchmark for several reasons. First, light and sweet oils like Brent and WTI are easier and less expensive to refine than heavier, sour oils. This quality makes Brent the desirable and representative type of oil for many refineries around the world.
It also has the advantage of being a waterborne crude. The convenient and stable location allows Brent Crude Oil to be exported worldwide with less risk of supply disruption than landlocked crudes.
Due to its popularity, Brent Crude Oil is used as the price barometer for nearly 80 percent of global crude. Fluctuations in Brent Crude Oil can profoundly impact operational costs and overall profitability of several industries that rely on it. Therefore, companies must monitor Brent Crude prices closely to manage potential impacts on their operations.
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