Originally Posted by
OpieTaylor
It may be a little misleading to say “upgrade”.
Sour crude is corrosive to equipment so US refinery’s spent billions to upgrade equipment to process it because it’s sourced from poor countries and acquired cheap.
Sweet crude is less corrosive to equipment and inferior metals can safely be used so the rest of the world built to the minimum. Whats makes sweat crude more expensive is it can be processed at most all refineries and sour cannot.
Your basically saying you have to upgrade your salt water engine to operate in fresh water.
Its definitely a loss of efficiency to spend billions in upgrades to run sour crude then arbitrarily stop and buy sweet crude.
You don’t have to upgrade a 777 to fly 100 people 500 miles, but it’s a non starter business model because of a gross loss of efficiency. After you spent so much money investing in the equipment that can do more.
You're absolutely right and you highlight a great paradox of the energy market and in a nutshell, this crisis.
We essentially pay a "purity premium" for Light Sweet Crude precisely because it requires less work to process, even though its natural yields are somewhat misaligned with the heavy duty needs of the modern industrial global economy.
While gasoline powers the passenger fleet, diesel and jet fuel power the global supply chain. Moreover, Heavy/Sour crudes naturally have much higher yields for jet fuel and diesel. This is where Complex Refineries like those in the USA shine and you are spot on to correct that "upgrade" was the wrong word choice.