Crude Oil

Crude oil is graded principally on two axes: API gravity, which measures how light or heavy it is relative to water, and sulphur content, which determines whether it is classed "sweet" or "sour." Both drive what a refinery can economically produce from a given parcel — lighter, sweeter crudes yield more high-value products like gasoline and diesel with less processing, while heavier, sourer grades need more complex refining but are typically priced at a discount.

Because grade and origin vary parcel to parcel, crude storage is run on a segregation basis rather than pooling everything into a single tank — a lease typically specifies which grade a tank holds and confirms API gravity, sulphur content, and BS&W (basic sediment and water) against the assay before the parcel is accepted. Holding crude storage across multiple hubs lets a trading desk match a given grade to the refinery network best suited to process it, rather than being limited to a single regional buyer pool.