# What Is West Texas Intermediate Crude Oil? WTI Benchmark Explained

![Worker standing near an oil jack pump platform that sources WTI crude oil.](https://www.investopedia.com/thmb/ObvcsnpJI1Fd9tOqzrkFAx8Z7t4=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/WestTexasIntermediateWTIDefinitionandUseAsaBenchmark-edfd364c6b034b448ecacea4498c54fa.jpg)

*— Olga Rolenko / Getty Images*

## What Is West Texas Intermediate (WTI)?

West Texas Intermediate (WTI) is a high-quality North American crude oil and one of the three main global benchmarks of oil pricing, alongside Brent and Dubai Crude. Originating in Texas, WTI is a light, sweet crude, meaning it has low density and less than 0.50% sulfur, making it easier and cheaper to refine into products like gasoline.

WTI is the underlying commodity for oil futures traded on the [New York Mercantile Exchange](https://www.investopedia.com/terms/n/nymex.asp) (NYMEX), with Cushing, Oklahoma, serving as its primary delivery hub. It is often compared with Brent crude, with pricing influenced by global supply, demand, and market fundamentals.

### Key Takeaways

*   West Texas Intermediate (WTI) is a light, sweet crude oil primarily sourced from Texas, known for its high quality and ease of refining.
*   WTI serves as a key benchmark for oil pricing in North America and is a major component of New York Mercantile Exchange (NYMEX) oil futures.
*   The oil is mainly delivered and settled at Cushing, Oklahoma, which is a pivotal hub in the U.S. with significant storage and pipeline capacity.
*   While WTI is highly regarded, Brent crude is the global pricing benchmark for two-thirds of the world's oil contracts, with WTI often trading at a discount due to increased U.S. production and logistical costs.
*   The U.S. is a net exporter of petroleum products, maintaining robust trade despite importing significant quantities from countries like Canada and Mexico.  
    

## How West Texas Intermediate (WTI) Impacts North American Oil Markets

WTI is the main oil benchmark for North America, as it is sourced from the United States. It originates mainly in the Permian Basin, the site of the nation's highest-producing oil field. The oil travels via pipeline from Texas to refineries in the Midwest and the Gulf of Mexico.

The main [delivery point](https://www.investopedia.com/terms/d/delivery-point.asp) for physical exchange and price settlement for WTI is Cushing, Oklahoma, known as "The Pipeline Crossroads of the World." The [Cushing hub](https://www.investopedia.com/sponsored-active-trader-week-1-5076084) delivery system consists of 35 (20 inbound and 15 outbound) pipelines and 16 storage terminals.

The hub has 90 million barrels of storage capacity and accounts for 13% of U.S. oil storage. The inbound and outbound capacity is 6.5 million barrels a day.

## WTI's Role as a Key Oil Benchmark in Global Markets

A [benchmark](https://www.investopedia.com/articles/investing/102314/understanding-benchmark-oils-brent-blend-wti-and-dubai.asp) in the oil market serves as a reference price for buyers and sellers of crude oil. Oil benchmarks are frequently referred to in the media as the [price of oil](https://www.investopedia.com/articles/economics/08/determining-oil-prices.asp).

[Brent crude](https://www.investopedia.com/terms/n/northseabrentcrude.asp) and WTI crude are the most popular benchmarks, but their prices are often contrasted. The difference in price between Brent and WTI is called the Brent-WTI spread.

WTI is not the most popular global benchmark; Brent holds that spot for two-thirds of oil contracts worldwide.

WTI and Brent, however, are both considered high-quality oils and therefore are the two most important oil benchmarks in the world.

###  Comparing WTI and Brent: Key Differences and Market Impacts

WTI has 0.24% to 0.34% sulfur, while Brent has 0.35% to 0.40%. Lower sulfur makes oil easier to refine, which is desirable. Oil with less than 0.5% sulfur is "sweet.".

Both benchmark oils are considered sweet, but WTI is sweeter, making it a bit easier to refine.

WTI should, in theory, trade at a premium to Brent due to its quality, but this isn't always true. Each crude type has unique supply and demand factors, affecting its prices differently.

Since the U.S. shale boom increased WTI production, its price has fallen and often trades at a discount to Brent. Brent connects to more global markets, affecting its price. Transporting WTI overseas is costly, making it hard for WTI to compete with Brent in pricing.

## Is the U.S. a Net Exporter or Importer of Oil?

The U.S. exports more petroleum products than it imports.

In 2023, the U.S. imported about 8.51 million barrels per day of petroleum products from 86 countries. The same year, it exported about 10.15 million barrels of petroleum to 173 countries and three U.S. territories.

Petroleum products include crude oil, hydrocarbon gas liquids, refined petroleum products, and biofuels.

## What Countries Does the U.S. Import Petroleum From?

The top five source countries for petroleum products imported into the U.S. are Canada, Mexico, Saudi Arabia, Iraq, and Brazil.

## What's the Difference Between Crude Oil, Petroleum, and Petroleum Products?

Crude oil is a mixture of hydrocarbons found in liquid form underground and brought to the surface for refining into fuel and other products. Petroleum products are processed in refineries from crude oil and other liquids. Petroleum is a broad term that includes both crude oil and petroleum products.

## The Bottom Line

West Texas Intermediate (WTI) is a light, sweet crude oil known for its low sulfur content and low density, making it easier to refine and a desirable benchmark for North American oil pricing. Priced at the Cushing, Oklahoma, delivery hub, WTI plays a central role in U.S. oil markets and is often cited in business reports as the reference for crude oil prices.

While WTI is key for North America, Brent remains the dominant global benchmark, with the Brent-WTI spread reflecting shifts in supply, demand, and the influence of the U.S. shale boom that has sometimes caused WTI to trade at a discount.

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