Every oil price headline says "Brent crude" or "WTI." They're both crude oil but they're different products priced in different locations. Here's what distinguishes them -- and which one actually determines what you pay at the pump.
Brent is the global benchmark -- if you're outside the US, Brent is what determines your petrol price. WTI is the US benchmark. They usually trade within $2-5 of each other. Both are at elevated levels right now due to the Iran/Hormuz risk premium.
Brent crude is extracted from the North Sea -- originally from the Brent oilfield operated by Shell, now from a blend of North Sea fields (Brent, Forties, Oseberg, Ekofisk and Troll, collectively called BFOE). It is a "light sweet" crude, meaning it has relatively low density and low sulphur content, making it easier and cheaper to refine into petrol and diesel. Brent is priced at the point of loading onto tankers in the North Sea and is delivered globally.
Approximately 75% of the world's oil contracts are priced relative to Brent. It is the benchmark for European, African, Middle Eastern and most Asian crude oil. When you see "oil prices" in international news, they almost always mean Brent.
West Texas Intermediate is extracted from US oilfields, primarily the Permian Basin in Texas and New Mexico. It is also a light sweet crude -- actually slightly lighter and sweeter than Brent -- and is the benchmark for oil produced and consumed in the Americas. WTI is priced at Cushing, Oklahoma, the major US pipeline hub. When US oil prices are discussed domestically, WTI is the reference.
WTI historically traded at a slight premium to Brent due to its slightly higher quality. Since the US shale revolution created a domestic oil surplus in the 2010s, WTI has generally traded at a $2-8 discount to Brent, reflecting pipeline and export constraints that limited US crude's access to global markets. Those constraints have eased significantly since 2016 as US LNG and crude export capacity expanded.
The Brent-WTI spread widens when US production is high relative to refinery and export capacity (crude is "trapped" at Cushing, pushing WTI down relative to Brent). It narrows when geopolitical risk premiums affect global supply (as now, with the Iran/Hormuz situation raising Brent more than WTI). The current $4 spread is slightly wider than the 2024 average of $3, reflecting the Hormuz risk which is more directly priced into Brent (the global benchmark) than WTI.
Outside the US: Brent is what your petrol price tracks. European, UK, Australian, Canadian, Asian and African fuel prices all reference Brent. The current $81 Brent price is what's feeding through to pump prices in these regions.
In the US: WTI is the primary reference for domestic refinery input costs, so US gasoline prices track WTI more closely. However, US Gulf Coast refineries also process imported crude priced off Brent, so the distinction is imperfect in practice. California and East Coast refineries, which import more, track Brent more closely than Gulf Coast and Midwest refineries.
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