Module 1 · The molecule and the rock

Reading a crude: API gravity, sulfur and the assay

Level 2 · Working knowledge 10 min read 4 questions

Two numbers get a crude most of the way to a price, and a third document decides which refineries can bid for it at all. This lesson is how to read them.

In hard-rock mining, grade is a percentage: how much metal is in the rock. Oil has no equivalent, because what comes out of the well is the product. What varies is the character of the mixture, and the industry compresses that character into two headline numbers plus a long technical document.

API gravity: how light the barrel is

API gravity is an inverted density scale defined by the American Petroleum Institute. Higher numbers mean lighter oil, which means a greater proportion of short-chain molecules, which means more of the barrel naturally falls into the petrol, jet and diesel range without further work. Water sits at 10 degrees API; oil below that sinks in water, which is why Venezuelan extra-heavy and Alberta bitumen behave the way they do.

Sulfur: sweet and sour

The second number is sulfur content by weight. Crude with little sulfur is called sweet; crude with a lot is sour. The convention places the line near 0.5% by weight, although like the density bands it is a vocabulary rather than a standard. Sulfur matters for three separate reasons, and they compound:

• It has to be removed, because sulfur in fuel becomes sulfur dioxide in exhaust and fuel specifications in most markets now cap it very tightly. Removing it means a hydrotreater, hydrogen supply, and energy.
• It corrodes equipment, so a refinery that runs sour crude needs metallurgy that a sweet-crude refinery does not.
• It poisons catalysts downstream, which constrains what else the plant can do with the stream.

The assay: the document that decides who can bid

Behind the two headline numbers sits the crude assay, a laboratory report that states, for one named crude stream, what proportion of it boils in each temperature range and what the quality of each of those cuts is: sulfur and nitrogen through the barrel, metals content, acidity, wax and asphaltene content, and the octane and cetane potential of the light and middle cuts.

A refinery's commercial team does not buy a crude because it is cheap. They run the assay through a model of their own plant, which knows the size of every unit, and ask what this barrel would actually produce on their configuration at today's product prices, minus the cost of processing it and getting it there. The answer is different for every refinery on Earth. That is the whole reason the same barrel is worth different amounts to different buyers on the same day.

Total acid number (TAN)

Naphthenic acid content. High-TAN crudes corrode distillation units unless the metallurgy is right, so they trade at a discount that has nothing to do with density or sulfur.

Metals (nickel, vanadium)

Concentrate in the heavy end and poison catalytic cracking catalysts. Heavy crudes typically carry more.

Asphaltenes

The heaviest, most aromatic fraction. They can precipitate out and foul equipment when incompatible crudes are blended - a real operational risk, covered in lesson 7.

Pour point

The temperature below which the crude stops flowing. Waxy crudes have high pour points and need heated pipelines and heated tanks.