Marketplace All-in-One So many different flavors of oil
Apr 15, 2026
Kevin Book, managing director at Clearview Energy and policy advisor, outlines who uses energy and how shortages ripple through industry. Fernando Valli, managing director of energy at Hedgeye, breaks down crude varieties, benchmarks, and why spot and futures prices diverge. They discuss tanker, delivery and inventory quirks. Short, lively tour of oil types and market mechanics.
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Different Oils Produce Different Products
- Oil grades differ by chemical makeup and location, so a barrel's yield of gasoline, diesel, and other products varies across types.
- Fernando Valli notes Brent is a North Sea field used as a financial benchmark while WTI delivers physically in Cushing, Oklahoma, explaining price differences.
Hormuz Crudes Are Medium Sour Diesel Heavy
- Crudes from the Strait of Hormuz are typically medium sour with higher sulfur and make more diesel than U.S. oils.
- Fernando Valli lists Saudi varietals, Morban, UAE and Iranian crude as examples of regional benchmarks affecting product mix.
Spot Oil Can Be Much Pricier Than Futures
- Spot (dated) physical oil can trade far above futures when immediate barrels are scarce, creating large prompt premiums.
- Fernando Valli explains a rare $30 dated Brent premium tied to tanker shortages and constrained physical movement.