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Nodding donkey pumping an oil well near Sarnia, Ontario, 2001
Nodding donkey pumping an oil well near Sarnia, Ontario, 2001

Petroleum (from Latin petrus – rock and oleum – oil), mineral oil, or crude oil, sometimes colloquially called black gold, is a thick, dark brown or greenish flammable liquid, which exists in the upper strata of some areas of the Earth's crust. It consists of a complex mixture of various hydrocarbons, largely of the methane series, but may vary much in appearance, composition, and purity.

It can be referenced with the prefix petro-, as in "petrodiesel".



Biogenic theory

Most geologists view crude oil, like coal and natural gas, as the product of compression of ancient vegetation over geological timescales. According to this theory, it was formed from the decayed remains of prehistoric marine animals and terrestrial plants. Over many centuries this organic matter, mixed with mud, was buried under thick sedimentary layers of material. The resulting high levels of heat and pressure caused the remains to metamorphose, first into a waxy material known as kerogen, and then into liquid and gaseous hydrocarbons. These then moved through adjacent rock layers until they became trapped underground in porous rocks called reservoirs, forming an oil field, from which the liquid can be extracted by drilling and pumping.

Alternative theories

Thomas Gold was the most widely known Western proponent of the Russian-Ukrainian theory of abiogenic petroleum origin. This theory suggests that large amounts of carbon exist naturally in the planet, some in the form of hydrocarbons. Hydrocarbons are lighter than rocks so they seep upward. Deep microbial life convert them into the various hydrocarbon deposits.

There is also a new theory, presented in Scientific American in 2003, which proposes that hydrocarbons are generated by active nuclear activity in the Earth's core.

As of 2004, these theories are very much minority positions in the community of geologists.


The component chemicals of petroleum are separated by distillation. Products based on refined crude oil include kerosene, benzene, gasoline, paraffin wax, asphalt, etc.

Strictly speaking, petroleum consists entirely of hydrocarbons, compounds of hydrogen and carbon.

The four lightest alkanes — CH4 (methane), C2H6 (ethane), C3H8 (propane) and C4H10 (butane) — are all gases, boiling at -107C, -67C, -43C, and -18C, respectively (-161, -88, -46, and -1 degrees F).

The chains in the C5-7 range are all light, easily vaporized, clear naphthas. They are used as solvents, dry cleaning fluids, and other quick-drying products. The chains from C6H14 through C12H26 are blended together and used for gasoline. Kerosene is made up of chains in the C10 to C15 range, followed by diesel fuel/heating oil (C10 to C20) and heavier fuel oils as the ones used in ship engines. These petroleum compounds are all liquid at room temperature.

Lubricating oils and semi-solid greases (including Vaseline) range from C16 up to C20.

Chains above C20 form solids, starting with paraffin wax, then tar and asphaltic bitumen.

Boiling ranges of petroleum atmospheric pressure distillation fractions in degrees Celsius:


Generally the first stage in the extraction of crude oil is to drill a well into the underground reservoir. Historically, in the USA some oil fields existed where the oil rose naturally to the surface, but most of these fields have long since been depleted. Often many wells will be drilled into the same reservoir, to ensure that the extraction rate will be economically viable. Also some wells may be used to pump water, steam or various gas mixtures into the reservoir to raise or maintain the reservoir pressure, and so maintain an economic extraction rate.

If the underground pressure in the oil reservoir is sufficient then the oil will be forced to the surface under this pressure. Gaseous fuels or natural gas are usually present, which also supplies needed underground pressure. In this situation it is sufficient to place a complex arrangement of valves on the well head to connect the well to a pipeline network for storage and processing.

Over the lifetime of the well the pressure will fall, and at some point there will be insufficient underground pressure to force the oil to the surface and the remaining oil in the well must be pumped out.

Various techniques aid in recovering oil from depleted or low pressure reservoirs, including Beam Pumps, Electrical Submersible Pumps (ESPs), and Gas Lift. Other techniques include Water Injection and Gas Re-injection, which help to maintain reservoir pressure.


The first oil wells were drilled in China in the 4th century or earlier. The oil was burned to evaporate brine and produce salt. By the 10th century, extensive bamboo pipelines connected oil wells with salt springs.

Oil field in California, 1938
Oil field in California, 1938

The petroleum industry began with Edwin Drake's discovery of oil in 1859, near Titusville, Pennsylvania. The industry grew slowly in the 1800s and did not become a real national concern until the early part of the 20th century; the introduction of the internal combustion engine provided a demand that has largely sustained the industry to this day. Early "local" finds like those in Pennsylvania and Ontario were quickly exhausted, leading to "oil booms" in Texas, Oklahoma, and California. Other countries had sizable oil reserves as a part of their colonial holdings, and started to develop them at an industrial level.

While even in 1955 coal was still the world's foremost fuel, oil began to take over. Following the 1973 energy crisis and the 1979 energy crisis there was significant media coverage of oil supply levels. This brought to light the concern that oil is a limited resource that we will eventually run out of, at least as an economically viable energy source. At the time, the most common and popular predictions were always quite dire, and when they did not come true, many dismissed all such discussion. The future of petroleum as a fuel remains somewhat controversial. USA Today news (2004) reports that there is 40 years of petroleum left in the ground. Some would argue that because the total amount of petroleum is finite, the dire predictions of the 1970s have merely been postponed. Others argue that technology will continue to allow for the production of cheap hydrocarbons and that the earth has vast sources of unconventional petroleum reserves in the form of tar sands, bitumen fields, oil shale, and methyl hydrate that will allow for petroleum use to continue for an extremely long period in the future.

Today about 90% of fuel needs are met by oil. Petroleum's worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world's most important commodities. Access to it was a major factor in several military conflicts, including World War II and the Gulf War. About 80% of the world's readily accessible reserves are located in the Middle East. The US has less than 3%.

The presence of the oil industry has significant social and environmental impacts, from accidents and from routine activities such as seismic exploration, drilling, and generation of polluting wastes. Oil extraction is costly and often environmentally damaging. Offshore exploration and extraction of oil disturbs the surrounding marine environment. Extraction may involve dredging, which stirs up the sea bed, killing the sea plants that marine creatures need to survive. Crude oil and refined fuel spills from tanker ship accidents have damaged fragile ecosystems in Alaska, the Galapagos Islands, Spain, and many other places. Renewable energy source alternatives do exist, although the degree to which they can replace petroleum and the possible environmental damage they may cause is controversial.


The oil industry classifies "crude" by the location of its origin (e.g., "West Texas Intermediate, WTI" or "Brent") and often by its relative weight or viscosity ("light", "intermediate" or "heavy"); refiners may also refer to it as "sweet", which means it contains relatively little sulfur, or as "sour", which means it contains substantial amounts of sulfur and requires more refining in order to meet current product specifications.

The world reference barrels are:

OPEC attempts to keep the price of the Opec Basket between upper and lower limits, by increasing and decreasing production. This makes the measure important for market analysts. The OPEC Basket, including a mix of light and heavy crudes, is heavier than both Brent and WTI.

See also [1]


The price of oil fluctuates quite widely in response to crises or recessions in major economies, because any economic downturn reduces the demand for oil. On the supply side the OPEC cartel uses its influence to stabilise or raise oil prices. During 2004, the OPEC official price range for its crude oil is US$22 to US$28/barrel.

A recent low point was reached in January 1999, after increased oil production from Iraq coincided with the Asian financial crisis, which reduced demand. The prices then rapidly increased, more than doubling by September 2000, then fell until the end of 2001 before steadily increasing, reaching US$40 to US$50/barrel by September 2004. [2] In October 2004, light crude futures on the NYMEX for November delivery exceeded US$53/barrel and for December delivery exceeded US$55/barrel.

The New York Mercantile Exchange (NYMEX) trades crude oil (including futures contracts) and provides the basis of US crude oil pricing via WTI (West Texas Intermediate). Other exchanges also trade crude oil futures, eg the International Petroleum Exchange (IPE) in London trades contracts in Brent crude. Wet oil is normally bought and sold via bilateral deals between companies, typically with reference to a marker crude oil grade that is typically quoted via the pricing agency Platts , for example in Europe a particular grade of oil, say Fulmar, might be sold at a price of "Brent plus US$0.25/barrel".

See also History and Analysis of Crude Oil Prices

Top petroleum producing countries

(Ordered by amount produced in 2003):

  • Saudi Arabia (OPEC)
  • United States
  • Russia
  • Iran (OPEC)
  • Mexico
  • China
  • Norway
  • Canada
  • United Arab Emirates (U.A.E) (OPEC)
  • Venezuela (OPEC)
  • United Kingdom (U.K)
  • Kuwait (OPEC)
  • Nigeria (OPEC)

(Ordered by amount exported in 2003):

  • Saudi Arabia (OPEC)
  • Russia
  • Norway
  • Iran (OPEC)
  • United Arab Emirates (U.A.E) (OPEC)
  • Venezuela (OPEC)
  • Kuwait (OPEC)
  • Nigeria (OPEC)
  • Mexico
  • Algeria (OPEC)
  • Libya (OPEC)

Note that the USA consumes almost all of its own production.

Source: Energy Statistics from the U.S. Government

See also: Organization of Petroleum Exporting Countries.

Related Topics

External links

  • The Politics of Oil - A report on the oil industry's influence of lawmakers and public policy by the Center for Public Integrity.
  • American Petroleum Institute - A site run by the American Petroleum Institute, the trade association of the US oil industry.
  • US Energy Information Administration - Part of the informative website of the US Government's Energy Information Administration.
  • US petroleum prices .
  • The End of the Age of Oil - article adapted from a talk by Caltech vice provost and professor of physics David Goodstein
  • BBC: Stability fears rise as oil reliance grows

Books About the Petroleum Industry

Writers Covering the Petroleum Industry

Last updated: 02-07-2005 04:18:59
Last updated: 04-25-2005 03:06:01