Sour crude

Sour crude is crude oil with high sulfur content, which needs more refining to remove impurities and therefore usually trades at a discount to sweeter grades.

Sour crude carries more sulfur than sweet grades, and refining it into clean fuels requires additional processing steps to strip that sulfur out. Because that extra processing costs money and not every refinery has the equipment to do it efficiently, sour crude generally trades at a discount to sweet crude of similar API gravity, though the exact discount shifts with how much sour-capable refining capacity is running at the time.

Much of the world’s crude oil, including large volumes produced in the Middle East and parts of Latin America, is sour rather than sweet. Refiners built to handle sour crude specifically seek it out because it is usually cheaper for the same energy content, and complex refineries designed for heavy, sour oil can turn a cost disadvantage in the crude into a competitive advantage in refining margins.