When you hear "oil prices" in the news, they're almost always referring to Brent crude — the global benchmark that prices approximately 75% of all internationally traded crude oil. Understanding Brent is essential for understanding energy markets.
Origins and Definition
Brent crude originated from the Brent oil field in the North Sea, discovered in 1971 and operated by Shell. Today, "Brent" refers to a price benchmark based on a basket of North Sea crude oils (Brent, Forties, Oseberg, Ekofisk, and Troll — collectively called BFOET). It trades on the Intercontinental Exchange (ICE) in London.
Why Brent Is the Global Benchmark
Brent's dominance stems from its seaborne nature — it can be shipped anywhere in the world, making it a natural reference for international crude pricing. Middle Eastern, African, and European crudes are typically priced as differentials to Brent. Even countries that produce crude nothing like North Sea oil use Brent as their pricing reference.