Heavy Crude

Heavy crude is a type of oil characterized by high density and viscosity, typically with a high sulfur content. It flows less easily than light crude and requires more complex and costly refining processes to produce usable fuels. As a result, heavy crude generally trades at a discount to lighter grades.

Refineries equipped with coking or upgrading units are better suited to process heavy crude and can capture value from the price discount. For example, refineries in the U.S. Gulf Coast have historically specialized in processing heavy crude from Canada or Latin America.

The economics of heavy crude are influenced by refinery configuration, environmental regulations, and transportation infrastructure. Changes in pipeline access or emissions standards can significantly affect heavy crude pricing. Understanding these dynamics is essential for traders, refiners, and policymakers involved in crude oil markets.