- How is oil traded?
- Who exports oil?
- Who imports oil?
- How does the oil get to the refinery?
- What are the major oil trading lanes?
To facilitate trading on world stock exchanges, the oil market uses specific local oils as benchmarks – Nymex (New York Mercantile Exchange) in the US uses West Texas Intermediate, in London the International Petroleum Exchange uses North Sea Brent and in Singapore Tapis is used. The Energy Information Administration (EIA) uses the Imported Refiner Acquisition Cost, the weighted average cost of all oil imported into the US as their "world oil price".
In 1960, some of the major oil producing nations set up OPEC (Organisation of the Petroleum Exporting Countries). Its mission – to achieve stable oil prices which are fair and reasonable for producers and consumers. It uses eleven crude oil grades and takes an average of their prices to produce its own reference figure. Today its members are:
| Algeria | Iran | Libya | Saudi Arabia |
| Angola | Iraq | Nigeria | United Arab Emirates |
| Indonesia | Kuwait | Qatar | Venezuela |
Together they hold over 78% of the world’s proven oil reserves and supply 42% of the world’s total oil production and half of the exports.
Click on the production regions below to see where oil is exported to:
Click on the region below to see where it gets its oil from:
How does the oil get to the refinery?
Crude oil is exported either by dedicated pipeline or by ship. Oil producing countries also refine oil and export the resulting products by sea in specially designed vessels which are usually smaller than those used to carry crude oil.
Vessels are categorized by their deadweight (dwt), which is the largest weight of cargo, bunkers and stores that a vessel can carry. Crude oil is carried in vessels up to 440,000 dwt. These vessels are up to 380 metres long, 68 metres wide, and reach 24.5 metres below sea level when fully laden.
Category |
DWT |
ULCC/V-Plus |
320,000+ |
VLCC |
200,000 - 320,000 |
Suezmax Tankers |
120,000 - 200,000 |
Aframax Tankers |
79,000 - 120,000 |
Panamax Tankers |
Up to approx 80,000 |
Handysize Tankers |
Up to approx 45,000 |
Small Tankers |
Up to approx 10,000 |
Each of these categories of vessel satisfies particular requirements, which is reflected in the markets in which they operate.
Source: Clarksons February 2006
What are the major oil trading lanes?
In the industry, these main trade lanes are referred to as:
From the Arabian Gulf:
| Arabian Gulf – US Gulf | AG/USG | |
| Arabian Gulf – China | AG/CHINA | |
| Arabian Gulf – Japan | AG/JAPAN | |
| Arabian Gulf – Singapore | AG/SINGAPORE | |
| Arabian Gulf – Europe | AG/UKC | (UKC = UK/Continent) |
From West Africa
| West Africa – US Gulf | WAF/USG | |
| West Africa – China | WAF/CHINA |
From North Sea
| North Sea – Canada | NSEA/ECC | (ECC = East |
| Coast Canada) |
Click here to view other world trade lanes