Crude oil prices have dropped to less than $1 dollar per barrel, but it is not necessarily as global as you may think. The $1 per barrel currently applies to the WTI benchmark. The Brent and the Dubai crude are still holding above $20 per barrel for now.

Oil prices are basically on three main benchmarks. Without necessarily going into the economics of oil prices which include demand and supply, derivatives, transportation, API gravity and sulfure contents, there are three main reference prices for the sale of crude oil.

These reference prices are based on the West Texas Intermediate (WTI), the Brent and Dubai Crude. These three are ordinarily types of crude oil. They are best understood based on their location. WTI is common to North America, Brent to Europe/Africa and Dubai Crude to the ME.

So basically, the way benchmark prices work is that the price that the WTI sells will largely determine how much other types of crude oil coming out of North America sells, same goes to the Brent for Europe/Africa and the Dubai crude for the Middle East.

So for example, types like the Light Louisiana Sweet and Heavy Louisiana Sweet from North America will have their prices determined by the price of the WTI. For Nigeria, we have Bonny Light, Brass river and the likes and their prices are determined by the price of the Brent.

Please note that the price of WTI, Brent and Dubai Crude only serve as the benchmark price. Each type of crude still has its own price based on a lot of economic and geological factors.