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What is Brent Crude?
Brent crude is a commodity used as a major oil pricing benchmark.
Brent crude is oil extracted from the North Sea. It is light and sweet, making it preferable for use in gasoline and other applications.
Key Takeaways
- Brent crude oil is a major global benchmark for oil.
- Unlike West Texas Intermediate (WTI) oil, which is exclusively used in the United States, Brent crude is used in global trade.
- Brent crude is best used in gasoline and petroleum-based products.
- Seasonal demand, supply changes, and geopolitical tensions can impact the price of brent.
- Changes in the price of Brent can have a downstream effect that influences many parts of the economy.
Why is Brent Crude a Key Benchmark?
As much as two-thirds of the world’s oil is priced in Brent crude. This is because Brent is a consistent, highly accessible, and standardized commodity that can be used in global trade.
Because oil is still used so widely across industries around the globe, Brent is an important benchmark for economic stability and global pricing.
What is Brent Crude Oil Used For?
Brent crude is used mostly in producing petroleum products. The oil is refined into petroleum, which then has a wide variety of uses, such as:
- Gasoline
- Diesel fuel
- Jet fuel
- Heating oil
- Plastics
- Chemicals and solvents
- Fertilizers
Brent Crude vs. West Texas Intermediate (WTI)
Unlike West Texas Intermediate (WTI) oil which is used primarily in the United States, Brent crude is a global oil that’s transported across the world and used in global trade.
When it comes to WTI vs Brent, here’s what you need to know.
Brent Crude Pricing
It’s important to note that while Brent is extracted in the North Sea, the Organization of the Petroleum Exporting Countries (OPEC), is responsible for the majority of its production and distribution. Therefore, OPEC can have an influence on the price of crude.
If you want to know what is the current price of Brent crude oil, you can find the commodity priced on the New York Mercantile Exchange (NYMEX) financial market under the symbol “BZ”.
7 Factors Affecting the Price of Brent Crude Oil
Many factors play a role in the brent crude oil price. These can include:
Brent Crude’s Impact on the Global Economy
While the global economy is attempting to wean off of fossil fuels, oil is still a very important commodity in powering the lives of most people around the world. As a major benchmark for oil pricing, Brent crude can be seen as a signpost of economic activity.
When Brent crude begins rising in price, it can lead to higher fuel costs, which affects major industries like transportation, manufacturing, and heating. These price changes can have a downstream effect all the way to consumers.
There is also an impact on countries that import or export oil. Oil-exporting countries can make a significant amount of their revenue from oil, and price changes can affect their GDP and economic growth.
Meanwhile, heavy oil-importing countries rely on outside sources for their Brent crude and can see their costs rise and fall with changes in Brent prices.
The Bottom Line
Brent crude oil is an important benchmark in the global economic landscape. According to the Brent crude definition, while the oil is extracted in the North Sea, it’s the Middle East and OPEC that controls the oil’s production and distribution. When you see the price of Brent change, it can be a result of anything from geopolitical tensions to seasonal changes in demand or even speculative trading by investors.
