What Is Light Crude Oil?

Light crude oil is a type of naturally occurring hydrocarbon that is characterized as having low specific gravity, low viscosity and high American Petroleum Institute (API) gravity. This liquid petroleum substance also has a relatively low density compared with other crude oils, and it contains high percentages of compounds that can be refined into gasoline and fuel oil. Light crude oil, because of its composition, tends to be worth more money than heavy crude. There are several standards that can be used to define what exactly constitutes light crude oil, and several benchmarks are used as well. West Texas Intermediate (WTI), Brent Crude and Dubai Crude are all generally referred to as light crude, despite having somewhat different API gravity levels.

Crude oil is a type of liquid petroleum that typically is recovered through drilling activities. There are two main categories that can be used to differentiate crude oils: weight and sulfur content. The lack of sulfur in crude oil typically results in it being referred to as "sweet," and crude that has a lot of sulfur in it might be called "sour." Oil also can be heavy or light based on its physical properties. Viscosity and specific gravity are two values that can determine whether it is heavy or light, although API gravity is a measurement that applies specifically to oil.

Whether crude oil is considered light can also depend on the part of the world where it is produced. The benchmark commonly used for light crude oil in the United States is WTI, with an API of 39.6. Brent Crude that is produced in northern Europe and Dubai Crude from the Persian Gulf are both considered light even though they each have a lower API gravity than WTI. A lower API corresponds with heavier oil, so Dubai Crude is actually too heavy at 31 API to be referred to as light if it were produced in the U.S. or Europe instead of the Persian Gulf.

The most valuable type of crude available on commodities markets typically is light and usually sweet. The high API gravity and lack of sulfur in this kind of oil make it easier to refine than heavier oils and mean that larger percentages of gasoline and fuel oil can be recovered. Gasoline and diesel fuel are some of the most desired products that are created in the refining process, so light crude oil typically yields more profitable results than other types of crude.