The Two Benchmarks
Two prices dominate the global oil market. Brent crude, extracted from the North Sea, is the benchmark for roughly two-thirds of internationally traded oil. West Texas Intermediate (WTI) is lighter and sweeter but landlocked in the United States, priced against delivery at Cushing, Oklahoma.
The spread between Brent and WTI reflects logistics, pipeline constraints and US export capacity. When the gap widens, it usually says more about American infrastructure than about global demand.
Who Controls the Supply
OPEC+ — the Organization of the Petroleum Exporting Countries plus allies including Russia — still produces roughly 40% of the world’s crude. Coordinated quota decisions taken at their monthly meetings can add or withdraw a million barrels per day from the market, and prices react in real time.
The counterweight is US shale. Since the 2010s, private American producers have been able to bring new supply online in months rather than years. This has made shale the effective marginal producer: when prices rise, rigs come back; when prices fall, hedges roll off and drilling slows.
What Actually Drives Demand
Roughly 100 million barrels are consumed globally every day. Transportation accounts for about 60% of that — passenger cars, trucks, shipping and aviation. Industry (petrochemicals, plastics, asphalt) takes most of the rest. Because these end uses track economic activity, oil is one of the cleanest real-time indicators of global growth.
The three biggest swing factors are Chinese industrial demand, Indian consumption growth and the pace of jet-fuel recovery. Small changes in any of these can shift the global balance by hundreds of thousands of barrels a day.
