Oil price: Brent, WTI and the factors that drive it

What crude oil is and how it is measured

Crude oil is a mixture of hydrocarbons extracted from underground. In refineries it is separated and converted into petrol, diesel, kerosene, fuel oil, bitumen and petrochemical feedstocks, from which plastics are made. There is no single crude oil: every field produces a blend with its own characteristics.

Two measurements define its quality, and therefore its value. Density is expressed in degrees API (API gravity): the higher the degree, the lighter the crude and the richer it is in high-value products such as petrol and diesel. Sulphur content distinguishes sweet crudes, low in sulphur, from sour crudes, which are more expensive to refine. Brent and WTI are both light, sweet crudes.

The market's unit of measurement is the barrel: 42 US gallons, i.e. about 159 litres. A price of 80 dollars per barrel therefore corresponds to about 50 US cents per litre of crude, before refining, transport and taxes.

Who produces and who consumes oil

According to the US Energy Information Administration (EIA), in 2023 the world's largest producer of petroleum and other liquids was the United States, with 21.9 million barrels per day, 22% of the total, followed by Saudi Arabia (11.1 million) and Russia (10.8 million), then by Canada and China. On the consumption side, in 2022 the leaders were the United States, with 20 million barrels per day, and China, with 15.2 million, ahead of India.

OPEC, the Organization of the Petroleum Exporting Countries, has coordinated its production since 2016 with other major producers, first and foremost Russia, in the group known as OPEC+. Its decisions to cut or raise quotas are among the news that moves the price most: in early September 2026, for example, OPEC+ suspended production increases and kept output levels unchanged for October.

A large share of the trade passes through a few chokepoints. The most important is the Strait of Hormuz, between Iran and Oman: according to the EIA, an average of 20 million barrels per day passed through it in 2024, equivalent to about 20% of global petroleum liquids consumption and more than a quarter of seaborne oil trade.

Brent and WTI: the two benchmark prices

Brent is the oil benchmark for Europe and takes its name from a North Sea field. WTI, West Texas Intermediate, is the benchmark light sweet crude in the United States; it is delivered at Cushing, Oklahoma, the country's major hub of pipelines and storage tanks. For Gulf crude bound for Asia other benchmarks are used, such as Dubai and Oman.

Brent and WTI move together but do not coincide: Brent usually costs a few dollars more. In the FT Mercati archive the average spread was 3.30 dollars per barrel in 2025 and 4.67 dollars in 2026 up to mid-September, owing to quality, transport costs and the balance between the US market and the rest of the world.

The price reported in the press is almost always that of the futures contract with the nearest expiry. Physical contracts also look to the exchange: the price of a cargo is usually set as Brent or WTI plus or minus a differential, which depends on the quality of the crude delivered.

The ICE Brent futures contract

Brent is traded mainly through the ICE Brent futures contract on the ICE Futures Europe exchange in London. The main terms of the contract:

Source: ICE, Brent Crude Futures contract specifications, read on 29 September 2026.

The NYMEX WTI futures contract

WTI is traded through the Light Sweet Crude Oil futures contract on NYMEX, CME Group's energy exchange in New York. It is a physically delivered contract:

Physical delivery at Cushing explains the strangest episode in the history of oil. On 20 April 2020, with demand collapsing because of the pandemic and storage tanks almost full, the May WTI futures contract closed at −37.63 dollars per barrel, the first time below zero since the contract began trading (1983): holders who could not take delivery of the crude paid to offload it (EIA).

Source: CME Group, Crude Oil Futures contract specifications, read on 29 September 2026.

What drives the oil price

Supply. OPEC+ decisions on quotas, production in the United States and in the other countries outside the agreement, investment in new fields and disruptions caused by wars, sanctions, accidents and hurricanes.

Demand. World economic growth, above all in China, the United States and India; road, air and sea transport; petrochemicals. Over the long term, engine efficiency, electric cars and the energy transition play a role.

Inventories. The EIA's weekly data on US inventories are among the most closely watched by the market; governments can release strategic reserves to curb price rises, as happened in 2022.

Geopolitics. The Middle East, Russia and shipping routes: when a conflict threatens supply, the market adds a risk premium to the price, which disappears quickly if the threat recedes. The year 2026 is the clearest example.

The dollar and finance. Oil is quoted in dollars: a weaker dollar tends to support the price, and funds amplify short-term moves. For buyers paying in euros the exchange rate also matters: that is why FT Mercati publishes the price in both currencies.

The recent history of the oil price

Brent daily closing prices at key moments, from the FT Mercati archive (which for Brent starts in 2001), in dollars per barrel. They are end-of-day closes and may differ slightly from ICE's official settlement prices:

How the oil price is used in contracts

Few companies buy crude oil, but almost all of them pay its price indirectly: in fuels, in energy, in sea freight and transport, which apply surcharges linked to the price of fuel, and in plastics, which are made from petroleum derivatives.

In supply contracts with a price adjustment clause, the typical reference is the monthly average of Brent in dollars, converted into euros with an agreed exchange-rate rule. It pays to define precisely which price (Brent or WTI, futures or physical), which average and which exchange rate: these are the most frequent sources of dispute.

Companies that want to protect themselves against price rises can hedge on the exchange with futures or with derivatives offered by banks. In any case, the price of crude reaches costs with different lags depending on the product and the contract: following it every day helps to anticipate increases before they show up on invoices.

Oil on FT Mercati

Every day we publish on the site the previous session's closing prices for Brent and WTI, in euros and dollars per barrel, with a chart of recent sessions: that is the oil price page. The daily news follows the moves of crude oil and the developments that explain them.

FT Mercati subscribers follow oil in real time together with metals, energy, currencies and freight, with history and alerts on the web and in the app: it is what anyone who has to buy and sell at the value of the moment needs. The service can be tried for free.