Brent Crude Oil (BRENT)

The global benchmark for crude oil prices. Brent is used to price two-thirds of the world's internationally traded crude oil.

2-Minute Beginner Summary

Brent Crude is the world's most important oil price benchmark. When international news mentions oil prices, they typically mean Brent. It's named after a North Sea oil field and is used to price oil from Europe, Africa, and the Middle East. Brent usually trades at a slight premium to WTI because it's waterborne and easier to ship globally.

What Is Brent Crude Oil?

Brent Crude is a light, sweet crude oil extracted from the North Sea. Despite the original Brent field being largely depleted, the benchmark now represents a blend of oils from multiple North Sea fields.

Why BRENT Matters

Brent prices affect global energy costs, from European heating bills to Asian manufacturing. It's the reference price for ~2/3 of global crude oil trading.

What Moves the Price?

Top 6 drivers affecting Brent Crude Oil prices:

OPEC+ Production

Most OPEC oil is priced off Brent. Production decisions directly impact the benchmark.

European Demand

European industrial activity and refining demand are key price drivers.

Asian Import Demand

China and India are the largest oil importers. Their economic growth drives Brent demand.

Geopolitical Risk Premium

Middle East tensions affect Brent more than WTI due to shipping route exposure.

Dollar Strength

Like WTI, Brent is dollar-denominated. A strong dollar pressures prices.

Refinery Margins

European and Asian refinery profitability influences demand for Brent crude.

Market Structure

Spot vs Futures

Brent trades primarily as futures contracts on ICE Futures Europe. The Dated Brent (spot market) is used for physical trading.

Contango & Backwardation

Brent often trades in mild contango. Its waterborne nature means storage is more accessible than landlocked WTI.

Key Exchanges: ICE Futures Europe, CME Group

Contract Size: 1,000 barrels per contract

Seasonality

Brent follows global refinery maintenance and demand cycles.

Peak Months: April, May, October, November

Low Months: February, March, September

Spring refinery turnarounds can temporarily reduce demand. Peak demand often occurs before summer driving season and winter heating season.

Macro Sensitivity

Brent shares WTI's macro correlations but is more sensitive to European and Asian economic conditions. Chinese PMI data particularly impacts Brent prices.

USD Sensitivity: negative
Inflation Sensitivity: positive
Growth Sensitivity: positive
Rates Sensitivity: negative

Stock & ETF Exposure Map

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Key Calendar & Reports

OPEC Monthly Oil Market Report (Monthly)

Source: OPEC Secretariat. Global supply/demand forecasts and production data

IEA Oil Market Report (Monthly)

Source: International Energy Agency. Independent global oil analysis

China Crude Imports Data (Monthly)

Source: Chinese General Administration of Customs. Largest importer's demand signal

How to Trade Brent Crude Oil

Access Brent through ETFs like BNO, or trade futures on ICE. Many investors prefer Brent over WTI for global energy exposure.

Frequently Asked Questions

Why is Brent more expensive than WTI?

Brent typically trades $3-5 above WTI. Its waterborne location makes global shipping easier, and international buyers prefer it. The premium narrows when U.S. exports increase.

Why use Brent as a benchmark instead of WTI?

Brent better reflects global supply/demand because it's accessible to international buyers. WTI was landlocked until U.S. export restrictions were lifted in 2015.

How do Middle East conflicts affect Brent?

Brent is more sensitive to Middle East tensions because much of the oil priced off Brent ships through the Strait of Hormuz. Disruption fears add a risk premium.

What is Dated Brent?

Dated Brent is the spot market price for physical oil loading 10-25 days ahead. It's the basis for pricing real cargo transactions.

How do European energy policies affect Brent?

EU carbon policies and renewable mandates are slowly reducing oil demand growth, but transportation and petrochemicals maintain baseline demand.

Is Brent or WTI better for trading?

Brent has higher global relevance but WTI has more liquidity in U.S. hours. Many traders follow both and trade the spread between them.

What is the Brent-WTI spread?

The price difference between Brent and WTI. A wider spread (Brent much higher) often signals strong international demand or U.S. oversupply.

How do Russian sanctions affect Brent?

Sanctions on Russian oil redirected flows, tightening Atlantic Basin supplies and supporting Brent prices. The G7 price cap introduced volatility.

Glossary

Dated Brent: The spot market price for physical Brent cargoes loading 10-25 days forward.
BFOE: Brent-Forties-Oseberg-Ekofisk blend that makes up the modern Brent benchmark.
Waterborne: Oil that can be loaded onto tankers and shipped globally.
Risk Premium: Extra price added due to geopolitical uncertainty about supply.
Refinery Turnaround: Scheduled maintenance that temporarily reduces refinery demand for crude.
Suezmax: Tanker size that can transit the Suez Canal, common for Brent shipping.
VLCC: Very Large Crude Carrier - supertankers that carry 2 million barrels.
Dubai Crude: Middle East benchmark used for pricing Asian oil imports.
EFP (Exchange for Physical): Converting futures positions to physical oil delivery.
Benchmark: A reference price that other similar products are priced against.