The Global Oil Market Is Based on a Fiction

What we call petroleum is more like a category of chemicals than a single thing.

By Robinson Meyer

Oil derricks in the in the Republic of Bashkortostan, Russia, against a cloudy sky

Andrey Rudakov   March 16, 2022, 9:01 AM ET

Crude oil, the world’s most important and ubiquitous commodity, is weird. It is weird both as a physical object and as a phenomenon that underpins the world economy. Every day, humanity sticks steel tubes several miles underground and sucks out magic rock juice, which is made of dead ocean bugs. After prospectors discovered petroleum in Titusville, Pennsylvania, in 1859, igniting the world’s first oil rush, northerners wondered whether petroleum was America’s divine reward for upholding “liberty and law” in the Civil War. 

Even today, certain facts about oil can instill a sense of divine awe. Each gallon of gasoline comprises 98 metric tons of ancient sea life, compressed by geology and chemistry into a liquid that can propel a 2,000-pound car the distance that a man could walk in a day. Burning that gallon of gasoline also releases 20 pounds of carbon dioxide into the atmosphere, where it will eventually warm the climate and acidify the ocean.

The oil market is weird too. Most of the time, the world doesn’t need to think about the pipelines, tankers, and on-land storage tanks that ferry oil around the world and allow for something like a spot market for it. Yet Russia’s invasion of Ukraine has brought the system to the fore. Over the past two weeks, the global oil benchmark has jumped to nearly $130 a barrel, only to fall below $100 today.

Even though the United States imports relatively little Russian oil, domestic gasoline prices have surged. The global oil system has been disturbed enough that one of its central elisions is now of material effect to just about everyone in America. Because even though oil has a global price, oil is not really one thing at all.

What we call petroleum is actually more a general category of chemicals than a single substance. All oil falls along two axes. First, oil can be sour or sweet, a range that indicates how much sulfur is in the crude. Sour oil has a lot of sulfur; sweet, very little. Sulfur causes particularly nasty forms of pollution—when burned, it forms sulfur dioxide, which causes heart and lung problems, generates smog, and produces acid rain—so sour crudes need more refining and processing before they can become usable products.

Second, oil can be heavy or light, a trait called its “density.” This describes something more fundamental. Crude oil is a mix of hydrogen and carbon atoms bound together in chains. When a crude is heavy, those chains are long and enormous, giving the consistency of window putty or caulk. In a light crude, the chains are short and small, making the oil more like water.

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https://www.theatlantic.com/science/archive/2022/03/russian-oil-sanctions-gas-prices/627074/