WTI goes global
Overview
WTI Midland is now the world’s largest freely traded grade of crude oil by output and volume. In December 2015, the US lifted a 40-year ban that had restricted exports of US crude overseas. Since the ban was lifted, export volumes have soared and US crude now makes its way to markets all over the world.
The meteoric rise of US crude on the global stage has made Permian basin crude WTI Midland the world’s most important grade and has put the US Gulf coast at the epicentre of global crude trade. Houston is the point of greatest optionality for crude oil. From Houston, crude can be refined in the world’s largest refining centre, moved domestically within the world’s largest oil demand hub, and exported to all corners of the globe. Price dictates these options, making the price at Houston the source of all key comparisons.
Light sweet WTI Midland is now firmly at the centre of price discovery for crude oil. It is a key component of Dated Brent and the global swing barrel, and European and Asian buyers are beginning to purchase crude on a WTI Houston basis. This crude has truly emerged as the heartbeat of the global crude system.
A global waterborne crude, underpinned by a liquid pipeline market
In most major markets, crude oil is generally transported by water. But the WTI Houston and Midland markets are different, with oil travelling first by pipeline in small, rateable transactions. The high volume of daily transactions means that there are many points of price discovery throughout the day. Our expert team of crude oil market reporters endeavour to capture it all.
Cargo markets by nature consist of a few, large single trades. But at the US Gulf coast, cargoes are priced at a differential to the pipeline market, so they benefit from the underlying price dynamics of the highly liquid and transparent US pipeline market.
For this reason, understanding the WTI supply chain and the drivers of its price formation is imperative for anyone buying, selling or trading crude oil across the globe.
WTI and Argus, a deeply rooted relationship
For two decades, Argus WTI assessments at Midland and Houston have been the standard physical benchmarks for US crude, as well as the settlement indexes for a robust derivatives market. These prices are assessed as differentials to the Argus WTI formula basis, based on the Nymex light sweet crude futures contract — one of the world’s most actively traded oil futures. They are the clear choice for trading companies seeking to manage WTI positions in the physical and paper markets.
Argus WTI Houston and Argus WTI Midland collectively form the basis of the world’s third-largest crude oil derivatives market, after Nymex light sweet and Ice Brent. The contracts are actively traded over the counter and cleared by oil brokers through exchanges such as CME and Ice.
Our rich, deep and trusted coverage of the US crude oil market is unrivalled. You need Argus to make confident business decisions.
Latest crude oil news
Browse the latest market moving news on the global crude oil industry.
Baghdad clamps down on 'illegal' oil smuggling to Iran
Baghdad clamps down on 'illegal' oil smuggling to Iran
Singapore, 20 November (Argus) — The Iraqi government is clamping down on the "illegal smuggling" of crude, bitumen and other oil products to Iran. Iraq's foreign affairs ministry has asked Iranian authorities to stop trucks carrying "oil, black oil and other petroleum products" from entering Iran through border crossing areas in Iraq's semi-autonomous Kurdistan region unless the exports are licensed by state-owned Somo, according to a 12 November letter seen by Argus . The movement of bitumen and other oil products across the Haj Omran-Piranshahr border point have already halted because of the new directive, market sources said. "The Parwiz Khan and Bashmakh borders are still exporting bitumen, but if this letter is implemented fully, Iraq's bitumen exports will be disrupted since none of these producers possess a Somo licence," an Iraqi bitumen market participant told Argus . The restrictions are expected to remain in place until further notice, although some market participants expressed doubt about how effective the crackdown will be. The directive will also have a bearing on crude producers in Iraq's Kurdistan region, which have been relying on local sales since a key export pipeline to Turkey was shut last year. Foreign operators operating in Kurdistan said they have been trucking crude to local refineries since the closure, but Argus understands that Kurdish crude is also being smuggled — by truck — across the border to Turkey, Iran and Syria. Iraq's oil ministry said this month that it has secured a commitment from the Kurdistan Regional Government (KRG) to scale back its crude production to "agreed levels" to help bring overall Iraqi output back below its Opec+ production target. Tight supply Participants in Iraq's bitumen market note that the smuggling directive coincides with already tight domestic supply, caused by limited availability of vacuum residue feedstock. Not only are higher margins encouraging Iraqi refineries to blend vacuum residue to produce high-sulphur fuel oil (HSFO), but a prolonged roadblock between Erbil and Sulaymaniyah, which started before the Kurdish election in October, has made it difficult for bitumen producers to transport vacuum residue from refineries to their production units, market participants said. Manifest charges were decreased to $10/t last week to encourage bitumen producers to transport vacuum residue, down from $35/t when the roadblock started. But most Kurdish suppliers have refrained from offering fresh cargoes for export in the past three weeks. A few Indian importers told Argus that it has become increasingly difficult to secure Iraqi bitumen drums because of a lack of offers. Some bitumen suppliers took to the sidelines in the expectation that export values will increase in line with rising Iranian seaborne prices. The limited availability of vacuum residue has boosted production costs for Iraqi bitumen suppliers. Iraqi drums will be offered higher than $340/t fob Bandar Abbas in the coming days, compared with around $322-325/t last week, producers said. One major southern Iraq-based producer has not been offering drummed cargoes since the end of October as the higher production costs have made export prices less competitive for major consumers like India, market participants said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: EU warns on fossil fuel ambition backsliding
Cop: EU warns on fossil fuel ambition backsliding
Baku, 20 November (Argus) — The EU has warned parties at the UN Cop 29 climate summit in Baku, Azerbaijan, against going back on pledges made last year in Dubai to transition away from fossil fuels. Language on transitioning away from all fossil fuels was included in the outcome of Cop 28 in Dubai last year in a historic first, with almost 200 countries including major fossil fuel producers agreeing to the text. And the EU is pushing for the same commitment to be included in this year's outcomes. "No one should pretend that the previous Cop didn't happen," European commissioner for energy Wopke Hoekstra said today. "There is the clear expectation that once you've signed up to do something, you actually do it," he said, adding that "the last Cop was very specific about transitioning away from fossil fuels". The EU views the declaration of G20 leaders, released on Tuesday morning, as an endorsement "in its entirety" of the outcomes of Cop 28, Hoekstra said. Further enhancing mitigation — reducing emissions — policies will be a "crystal clear element" that the bloc will focus on in the coming days, he said. Failing to include language on transitioning away from fossil fuels would mean last year's Cop should be considered a failure, according to Lidia Pereira, head of the European parliament delegation in Baku. But she trusts delegates from the UAE to be strong advocates for the wording on transitioning away from fossil fuels, she said. The UAE is part of the Arab States negotiating group, which also includes Saudi Arabia, Egypt, Iraq and Libya. Work on a mitigation outcome was rescued from the brink of collapse at the start of last week but is progressing slowly. As of last night negotiators did not have a draft text on mitigation, but must deliver one to the Cop presidency for publication around midnight. If parties fail to come to a conclusion in mitigation talks, the text for a new finance goal may become the main space in which fossil fuel language could land. Its most recent draft, released on 16 November, includes references to transitioning away from fossil fuels. Negotiations on climate financing — the so-called new collective quantified goal (NCQG) — to help developing countries adapt to and address climate change are central to this year's Cop. Thorny issues have included the amount of financing, which countries should contribute, the form that the financing will take and the broadening of the contributor base. The next draft is scheduled to released around midnight on Wednesday, after negotiators have spent days working to bring parties' initial positions closer together. Hoekstra refused to be drawn on reports, raised by Bolivia's representative , that the EU is eyeing a number of $200bn/yr for the NCQG, well below the expectations of likely recipient countries. The EU prefers to focus on other elements, including progress on Article 6 and mitigation, before having a "meaningful conversation about the exact amount", Hoekstra said. Talks on finalising the details of an international carbon market under the Article 6 of the Paris Agreement continue to inch forward at Cop 29, but with key sticking points yet to be resolved. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Denmark tops 'climate change performance index'
Denmark tops 'climate change performance index'
Berlin, 20 November (Argus) — Denmark tops the latest "climate change performance index" (CCPI 2025) published on Wednesday by German non-governmental organisations (NGO) Germanwatch and NewClimate Institute. But the country only manages fourth place, with no nations doing enough to meet its climate targets under the Paris Agreement, the NGOs said. The CCPI, published annually, monitors the climate action performance of 63 countries and the European Union (EU), which collectively account for more than 90pc of global greenhouse gas (GHG) emissions. "No country deserves to be on the podium, but some countries are doing better than others," co-author Jan Burck from Germanwatch said at the presentation of the index at the UN Cop 29 climate summit in Baku, Azerbaijan. Denmark tops the league for the fourth year running, thanks to its steady and comprehensive climate policy, its strong targets and renewables deployment. Other "high performers" include the UK, which is "back on track" after having seen its ranking plummet: the UK moved up to 6th position from 20th, thanks to the new government's strong climate policy framework, and the country's successful coal phase-out. But the UK's transition away from oil and gas is progressing too slowly, the NGOs warned. India, another high performer, managed to climb the ranks to 10th place thanks to strong renewables deployment. Medium-performing countries include Germany, which has fallen two ranks to 16th despite strong renewables deployment, as the country's buildings and transport sectors struggle to reduce their emissions, and as the country plans to expand its gas consumption, and faces budgetary constraints. Medium-ranking Brazil, while improving its CCPI ranking since president Luiz Inacio Lula da Silva took office last year, fell five ranks on the year to 28th, given the country's continuously strong reliance on fossil fuels, and despite lower deforestation rates. Unlike previous editions, no EU country received an overall "very low" rating. Bulgaria, at 50th, is the worst performing EU country. The four last-placed countries in the CCPI — Iran (67th) at the bottom, Saudi Arabia, the UAE and Russia — number among the world's largest oil and gas producers.These countries not only emit high volumes of GHG, but also – largely – lack emissions policies or climate regulation, with no discernible shift away from the fossil fuel business model and a proportion of renewables in their respective energy mix that is below 3pc, according to the NGOs. Co-author Niklas Hoehne from NewClimate said that there are many signs that the world is at a turning point, and that the peak in global emissions is "within reach", though US president-elect Donald Trump could act as a "brake" on the now necessary rapid cuts in emissions. The US occupy an unchanged 57th position. Burck said that China, falling to 55th from 51st position, faces a "huge" opportunity to gain international recognition, as the country's GHG emissions appear to have almost peaked, and as it experiences an unprecedented boom in renewable energies. What is now needed is a "clear move away from fossil fuels", Burck said. This clear move is not yet apparent, but this could change with the country's upcoming new five-year plan. In this case, China could "quickly" climb up the index, Burck said. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Trump effect on US crude output 'not to be overstated'
Trump effect on US crude output 'not to be overstated'
London, 19 November (Argus) — Donald Trump's return to the White House will probably only have a marginal effect on US oil production in the near term, energy and commodities economists told the Argus European Crude Conference in London today. Even pro-Trump oil executives in the US shale patch "don't believe there is a magical spigot that you can turn that would automatically increase growth... within a four-year period", the global head of commodities at US-based bank Standard Chartered, Paul Horsnell, told delegates. There are some steps that Trump's new administration could take to boost production further down the line, such as a faster pace of oil and gas licensing and allowing more drilling in Alaska, but "there isn't a particular obstacle" holding the shale sector back at the moment, Horsnell said. He noted that despite shale producers' best efforts, output is down in North Dakota, the Bakken and Oklahoma. Output is down in California, Alaska and offshore as well, he said. Despite New Mexico and Texas "running pretty hot", Horsnell said there is "not much more you can bring to bear, even if you were directly subsidising the sector, which isn't really an option". Horsnell said he is "not really getting the buzz, certainly from Texas, that they feel things are going to change very dramatically". The emphasis within the US shale patch remains on drilling longer lateral wells so that operators are "moving out of tier one acreage into tier two acreage", he said. This takes time, "but there's nothing that central government can do to turn tier two acreage into tier one acreage or to drill faster or to get the technology working even faster or bring on AI [Artificial Intelligence] even quicker". While there will probably be more supply in Trump's second term, "this return to the dream of American energy dominance" is "not to be overstated", Horsnell said. Standard Chartered forecasts that US crude output will grow by 600,000 b/d next year from its current level of 13.4mn b/d. "We are just looking at the US nudging forward next year," Horsnell said "We're looking for high 13mn b/d or 14mn b/d." Trading firm Trafigura's chief economist Saad Rahim told the conference that there has also been "a shift in composition of the shale patch", noting that ExxonMobil, Chevron and ConocoPhillips have gone from about 10pc ownership of US shale acreage to almost 50pc. A new "portfolio approach" is being taken to manage this acreage, with efficiency gains driving value for these companies rather than production growth, Rahim said. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Why Argus WTI?
Unrivalled methodology
Argus reports the US Gulf coast pipeline market the way it trades, rather than forcing it into a one-size-fits-all methodology. We publish volume-weighted average indexes for each assessed grade and location using reported deals done, and publish the underlying deals themselves. This provides our subscribers with accuracy and convenience, as well as a transparent audit trail.
An all-in-one view of your data
Hourly snapshots of the WTI Midland and WTI Houston markets can be viewed on the Argus Crude Market Ticker, also accessible on CME Direct. And for the first time, Argus WTI Midland and Houston futures can be traded directly on-screen through CME Direct, including by entities that do not retain a cash market broker.
Innovation and responsiveness
Argus has reported waterborne cargo prices for WTI Midland for several years on both fob US Gulf coast and delivered-Europe and Asia bases. As the market has developed, so has our approach. In November 2022, we augmented our rolling price for fob Midland WTI by reporting three intramonth periods, to better reflect market structure and the way cargoes are traded.
An expert reporting team
The Argus WTI Houston and Midland assessments are underpinned by the expertise of our Americas editorial team. We demystifying these complex markets through independent and transparent pricing, built on the strength of our relationships with the market. We have been surveying these pipeline markets for decades, meaning we understand the vital connections and nuances that exist.
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Our commentary on the rise of WTI
