Heavy crude oil is characterized by high density, high viscosity, and lower API gravity (typically below 20 degrees), requiring specialized extraction and refining techniques. This oil type contains more complex hydrocarbon molecules and often higher sulfur content, making it more challenging and expensive to process than conventional light crude oil. Heavy crude represents a significant portion of global oil reserves.

The economics of heavy crude oil depend on price differentials to light crude, refining capacity, and environmental regulations. Climate policies increasingly scrutinize heavy crude due to higher carbon intensity in both extraction and refining processes. Transportation infrastructure and specialized refining capacity constraints create unique supply chain dynamics for heavy crude oil markets.

Real-world example: Venezuelan heavy crude oil production declines due to infrastructure problems, tightening global heavy crude supply and narrowing price discounts from $20 to $12 per barrel versus light crude benchmarks.