How are oil prices set? (Pls. answer my dumb questions) -- basics requested

I was going to suggest a hypothetical in which a "Martian" asks this
question, but that seems superfluous since the average American (me)
knows about as much as an extraterrestrial might about this question.
Possibly less.

Oil is a commodity produced by many nations and often by many private
companies within each nation. So exactly how is "THE" price of a
barrel of oil determined?

I understand that there are different varieties and grades of oil, but
that price differences between "Brent, WTI, and the Opec basket" are
not large and that "crude prices closely correlate with one
another". For the moment then, rather than be overwhelmed with
detail, let's imagine we're talking about some generic but highly
sought after "oil" that is produced by many countries and many
companies within each country.

Why isn't there a variety of prices depending on who is offering the
product? Or is there?

I understand that the price of oil is denominated in U.S. dollars. Is
this correct, or are there significant exceptions? And is this the
same as saying that oil must be bought using U.S. dollars? I seem to
recall something about Iran requiring payment in Euros or Yen or
something.

I guess this ought to be enough for now, though many questions remain
to be asked.

Please answer directly (no hyperlinks) and as succinctly as
possible. The reason I ask for no hyperlinks is that everybody and
their uncle may have different answers to the question. I could
search the Net myself, but am trying to concentrate the answers here
in this thread. If you don't feel capable of answering this question
personally here, in your own words, then probably your grasp of the
matter is tenuous anyway.

Please note that (mirabile dictu) I have no agenda to advance. This
is not a trap, or a pretext for advancing my own opinions, since I
have none. I may ask pointed questions in response. I may express
puzzlement about apparently contradictory elements. I may request
more detail. I have no axe to grind because I have no basis for any
opinion as yet.

That's about it. Thanks in advance.

.

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