Brent Crude is a global concept that functions as the world's leading benchmark for pricing crude oil, not a physical institution or scheme. It is a classification for a type of petroleum known as light and sweet crude oil, meaning it has a low density and a low sulfur content, making it easier to refine into products like petrol and diesel.
The concept originated from the Brent oilfield in the North Sea, where the oil was first extracted in 1976. It became the dominant global reference after the 1973 oil crisis, as oil markets shifted from fixed pricing controlled by producers to open, market-driven trading. Its location in the politically stable North Sea and its ease of transport via sea made it a reliable reference point.
Brent Crude establishes the price for approximately two-thirds to 80% of the global trade in petroleum, particularly for grades from Europe, Africa, and the Middle East. The mechanism works through a futures contract traded on the Intercontinental Exchange (ICE), with the price for other crude oils being set as a differential (premium or discount) to the Brent price.
It connects directly to the other major global benchmark, West Texas Intermediate (WTI), which is the primary reference for North American crude. Its price is highly sensitive to global geopolitical events, such as tensions in the Middle East and disruptions to shipping routes like the Strait of Hormuz.
The benchmark has changed significantly to maintain its relevance. Originally from the single Brent field, the classification was expanded to a blend of North Sea crudes known as the BFOET Quotation (Brent, Forties, Oseberg, Ekofisk, and Troll). In 2021, following the end of production from the original Brent field, the ICE expanded the blend, and most recently, petroleum from Midland, Texas, was added to the classification in 2023.