Definition
Brent vs WTI
Brent and WTI are the two main global crude oil benchmarks: Brent from the North Sea prices most international oil, while WTI from the US is lighter and a key American reference.
Brent is the benchmark for roughly two-thirds of globally traded oil, including much of what India imports, while WTI (West Texas Intermediate) is the main US benchmark and the basis for MCX crude futures. WTI is slightly lighter and sweeter.
The Brent-WTI spread reflects regional supply, transport and logistics differences. India tracks Brent closely because its oil import bill, refiners' margins and fuel prices are tied more to Brent than WTI.
Related terms
- Current Account Deficit (CAD)The current account deficit arises when a country pays more abroad for goods, services and income than it earns, meaning it is a net borrower from the rest of the world.
- Crude Oil FuturesCrude oil futures are contracts to buy or sell oil at a set price for future delivery, with MCX crude tracking the global WTI benchmark in rupee terms.
- Crack SpreadThe crack spread is the price difference between crude oil and the refined products (petrol, diesel) made from it, a key measure of refinery profitability.
- OPECOPEC is the Organization of the Petroleum Exporting Countries, a cartel of major oil producers that coordinates output to influence global crude prices.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.