Brent crude oil price annually 1976-2023

The average annual price of Brent crude oil stood at 82.5 U.S. dollars per barrel as of January 2023. This is around 18 U.S. dollars lower than the annual average in 2022. Increase in oil prices came in the wake of an energy supply shortage that began gripping Europe in late 2021, as well as concerns over oil supply bottlenecks following the Russia-Ukraine war. Brent is the world's leading price benchmark for Atlantic basin crude oils. Crude oil is one of the most closely observed commodity prices as it influences costs across all stages of the production process and consequently alters the price of consumer goods as well.

What determines crude oil benchmarks?

In the past decade, crude oil prices have been especially volatile. Their inherent inelasticity regarding short-term changes in demand and supply mean that oil prices are erratic by nature. However, since the 2009 financial crisis, many commercial developments have greatly contributed to price volatility; such as economic growth by BRIC countries like China and India, and the advent of hydraulic fracturing and horizontal drilling in the U.S. The outbreak of the coronavirus pandemic and the Russia-Ukraine war are examples of geopolitical events dictating prices.

Light crude oils - Brent and WTI

Brent Crude is considered a classification of sweet light crude oil and acts as a benchmark price for oil around the world. It is considered a sweet light crude oil due to its low sulfur content and a low density and may be easily refined into gasoline. This oil originates in the North Sea and is comprised of several different oil blends including Brent Blend and Ekofisk crude. Often, this crude oil is refined in Northwest Europe.

Another sweet light oil often referenced alongside UK Brent is West Texas Intermediate (WTI). WTI oil prices totaled 67.99 U.S. dollars per barrel in 2021.