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Petroleum is a term that includes a wide variety of liquid hydrocarbons . Many scientists also include natural gas in their definition of petroleum. The most familiar types of petroleum are tar, oil, and natural gas. Petroleum forms through the accumulation, burial, and transformation of organic materialsuch as the remains of plants and animalsby chemical reactions over long periods of time. After petroleum has been generated, it migrates upward through the earth, seeping out at the surface of the earth if it is not trapped below the surface. Petroleum accumulates when it migrates into a porous rock called a reservoir that has a non-porous seal or cap rock that prevents the oil from migrating farther. To fully understand how petroleum forms and accumulates requires considerable knowledge of geology , including sedimentary rocks , geological structures (faults and domes, for example), and forms of life that have been fossilized or transformed into petroleum throughout the earth's long history.

Tremendous petroleum reserves have been produced from areas all over the world. In the United States, the states of Alaska, California, Louisiana, Michigan, Oklahoma, Texas, and Wyoming are among the most important sources of petroleum. Other countries that produce great amounts of petroleum include Saudi Arabia, Iran, Iraq, Kuwait, Algeria, Libya, Nigeria, Indonesia, the former Soviet Union, Mexico, and Venezuela.

Petroleum products have been in use for many years. Primitive man might have used torches made from pieces of wood dipped in oil for lighting as early as 20,000 b.c. At around 5,000 b.c., the Chinese apparently found oil when they were digging underground. Widespread use of petroleum probably began in the Middle East by the Mesopotamians, perhaps by 3,000 b.c., and probably in other areas where oil seeps were visible at the surface of the earth. Exploration for petroleum in the United States began in 1853, when George Bissell, a lawyer, recognized the potential use of oil as a source of lamp fuel. Bissell also recognized that boring or drilling into the earth, as was done to recover salt, might provide access to greater supplies of petroleum than surface seeps. In 1857, Bissell hired Edwin Drakeoften called "Colonel" Drake despite having worked as a railroad conductorto begin drilling the first successful oil well. The well was drilled in 1859 in Titusville, Pennsylvania. Once the usefulness of oil as a fuel was widely recognized, exploration for oil increased. By 1885, oil was discovered in Sumatra, Indonesia. The famous "gusher" in the Spindletop field in eastern Texas was drilled in 1901. The discoveries of giant oil fields in the Middle East began in 1908 when the company now known as British Petroleum drilled a well in Persia (now Iran). During World Wars I and II, oil became a critical factor in the ability to successfully wage war.

Currently, petroleum is among our most important natural resources. We use gasoline, jet fuel, and diesel fuel to run cars, trucks, aircraft, ships, and other vehicles. Home heat sources include oil, natural gas, and electricity , which in many areas is generated by burning natural gas. Petroleum and petroleum-based chemicals are important in manufacturing plastic, wax, fertilizers, lubricants, and many other goods. Thus, petroleum is an important part of many human activities.

Petroleum, including liquid oil and natural gas, consists of substances known as hydrocarbons. Hydrocarbons, as their name suggests, comprise hydrogen and carbon , with small amounts of impurities such as nitrogen, oxygen , and sulfur. The molecules of hydrocarbons can be as simple as that of methane, which consists of a carbon atom surrounded by four hydrogen atoms, abbreviated as CH4. More complex hydrocarbons, such as naphthenes, include rings of carbon atoms (and attached hydrogen atoms) linked together. Differences in the number of hydrogen and carbon atoms in molecules as well as their molecular structure (carbon atoms arranged in a ring structure, chain, or tetrahedron, for example) produce numerous types of petroleum.

Different types of petroleum can be used in different ways. Jet fuel differs from the gasoline that automobiles consume, for example. Refineries separate different petroleum products by heating petroleum to the point that heavy hydrocarbon molecules separate from lighter hydrocarbons so that each product can be used for a specific purpose. Refining reduces the waste associated with using limited supplies of more expensive petroleum products in cases in which a cheaper, more plentiful type of petroleum would suffice. Thus, tar or asphalt, the dense, nearly solid hydrocarbons, can be used for road surfaces and roofing materials, waxy substances called paraffins can be used to make candles and other products, and less dense, liquid hydrocarbons can be used for engine fuels .

Petroleum is typically found beneath the surface of the earth in accumulations known as fields. Fields can contain oil, gas, tar, water , and other substances, but oil, gas, and water are the most common. In order for a field to form, there must be some sort of structure to trap the petroleum, a seal on the trap that prohibits leakage of the petroleum, and a reservoir rock that has adequate pore space, or void space, to hold the petroleum. To find these features together in an area in which petroleum has been generated by chemical reactions affecting organic remains requires many coincidences of timing of natural processes.

Petroleum generation occurs over long periods of timemillions of years. In order for petroleum generation to occur, organic matter such as dead plants or animals must accumulate in large quantities. The organic matter can be deposited along with sediments and later buried as more sediments accumulate on top. The sediments and organic material that accumulate are called source rock. After burial, chemical activity in the absence of oxygen allows the organic material in the source rock to change into petroleum without the organic matter simply rotting. A good petroleum source rock is a sedimentary rock such as shale or limestone that contains between 1% and 5% organic carbon. Rich source rocks occur in many environments, including lakes , deep areas of the seas and oceans , and swamps. The source rocks must be buried deep enough below the surface of the earth to heat up the organic material, but not so deep that the rocks metamorphose or that the organic material changes to graphite or materials other than hydrocarbons. Temperatures less than 302°F (150°C) are typical for petroleum generation.

Once a source rock generates and expels petroleum, the petroleum migrates from the source rock to a rock that can store the petroleum. A rock capable of storing petroleum in its pore spaces, the void spaces between the grains of sediment in a rock, is known as a reservoir rock. Rocks that have sufficient pore space through which petroleum can move include sandstone , limestone, and rocks that have many fractures. A good reservoir rock might have pore space that exceeds 30% of the rock volume. Poor quality reservoir rocks have less than 10% void space capable of storing petroleum. Rocks that lack pore space tend to lack permeability , the property of rock that allows fluid to pass through the pore spaces of the rock. With very few pores, it is not likely that the pores are connected and less likely that fluid will flow through the rock than in a rock with larger or more abundant pore spaces. Highly porous rocks tend to have better permeability because the greater number of pores and larger pore sizes tend to allow fluids to move through the reservoir more easily. The property of permeability is critical to producing petroleum: if fluids can not migrate through a reservoir rock to a petroleum production

well, the well will not produce much petroleum and the money spent to drill the well has been wasted.

In order for a reservoir to contain petroleum, the reservoir must be shaped and sealed like a container. Good petroleum reservoirs are sealed by a less porous and permeable rock known as a seal or cap rock. The seal prevents the petroleum from migrating further. Rocks like shale and salt provide excellent seals for reservoir rocks because they do not allow fluids to pass through them easily. Seal-forming rocks tend to be made of small particles of sediment that fit closely together so that pore spaces are small and poorly connected. The permeability of a seal must be virtually zero in order to retain petroleum in a reservoir rock for millions to hundreds of millions of years, the time span between formation of petroleum to the discovery and production of many petroleum fields. Likewise, the seal must not be subject to forces within the earth that might cause fractures or other breaks in the seal to form.

Reservoir rocks and seals work together to form a trap for petroleum. Typical traps for petroleum include hills shaped similar to upside-down bowls below the surface of the earth, known as anticlines, or traps formed by faults. Abrupt changes in rock type can form good traps, such as sandstone deposits next to shale deposits, especially if a sand deposit is encased in a rock that is sufficiently rich in organic matter to act as a petroleum source and endowed with the properties of a good seal.

An important aspect of the formation of petroleum accumulations is timing. The reservoir must have been deposited prior to petroleum migrating from the source rock to the reservoir rock. The seal and trap must have been developed prior to petroleum accumulating in the reservoir, or else the petroleum would have migrated farther. The source rock must have been exposed to the appropriate temperature and pressure conditions over long periods of time to change the organic matter to petroleum. The necessary coincidence of several conditions is difficult to achieve in nature.

Petroleum exploration and production activities are performed primarily by geologists, geophysicists, and engineers. Geologists look for areas of the earth where sediments accumulate. They then examine the area of interest more closely to determine whether or not source rocks and reservoir rocks exist there. They examine the rocks at the surface of the earth and information from wells drilled in the area. Geologists also examine satellite images of large or remote areas to evaluate the rocks more quickly.

Geophysicists examine seismic data, data derived from recording waves of energy introduced into the rock layers of the earth through dynamite explosions or other means, to determine the shape of the rock layers beneath the surface and whether or not traps such as faults or anticlines exist.

Once the geologist or geophysicist has gathered evidence of potential for a petroleum accumulation, called a prospect, an engineer assists in determining how to drill a well or multiple wells to assess the prospect. Drilling a well to explore for petroleum can cost as little as $100,000 and as much as $30,000,000 or more, depending on how deep the well must be drilled, what types of rocks are present, and how remote the well location is. Thus, the scientists must evaluate how much the well might cost, how big the prospect might be, and how likely the scientific predictions are to be correct. In general, approximately 15% of exploration wells are successful.

Once a successful exploration well has been drilled, the oil and/or gas flow are pumped to the surface of the earth through the well. At the surface, the petroleum either moves through a pipeline or is stored in a tank or on a ship until it can be sold.

Estimates of the amount of recoverable oil and natural gas in the United States are 113 billion barrels of oil and 1,074 trillion cubic feet of natural gas. Worldwide estimates of recoverable oil and natural gas are 1 trillion barrels of oil and 5 quadrillion cubic feet of natural gas. These worldwide reserves are expected to supply 45 years of fuel at current production rates with expected increases in demand. However, such estimates do not take into account reserves added through new discoveries or through the development of new technology that would allow more oil and natural gas to be recovered from existing oil and natural gas fields.

Daily consumption of oil in the United States exceeds 17 million barrels of oil per day, of which approximately 7 million barrels are in the form of gasoline for vehicles. Over half the petroleum consumed in the United States is imported from other countries. (Assuming oil costs $20 per barrel and 8.5 million barrels per day are imported, over one billion dollars per week are spent on oil imports). While the United States has tremendous reserves of petroleum, the undiscovered fields that remain tend to be smaller than the fields currently producing petroleum outside of the United States. Thus, less expensive foreign reserves are imported to the United States. When foreign petroleum increases in price, more exploration occurs in the United States as it becomes more profitable to drill wells in order to exploit smaller reservoirs.

Current research in petroleum includes many different activities. Within companies that explore for and produce petroleum, scientists and engineers try to determine where they should explore for petroleum, how they might recover more petroleum from a given field, and what types of tools can be lowered into wells in order to enhance our understanding of whether or not that individual well might have penetrated an oil or gas field. They also examine fundamental aspects of how the earth behaves, such as how rocks form and what forms of life have existed at various times in the earth's history. The United States Geological Survey continues to evaluate petroleum reserves and new technology to produce oil and gas. The federal government operates several facilities called Strategic Petroleum Reserves that store large quantities of petroleum for use in times of supply crisis.

Petroleum exploration specialists are using a type of geophysical data known as three-dimensional seismic data to study the structures and rock types below the surface of the earth in order to determine where exploration wells might successfully produce petroleum. Geochemists are assessing the results of studies of the chemistry of the surface of the earth and whether or not these results can improve the predictions of scientists prior to drilling expensive exploratory wells.

Significant recent discoveries of petroleum have been made in many areas of the world: Algeria, Brazil, China, Egypt, Indonesia, the Ivory Coast, Malaysia, Papua New Guinea, Thailand, the United Kingdom, and Vietnam, among others. In the United States, the Gulf of Mexico , Gulf Coast states, California, and Alaska continue to attract the interest of explorers.

See also Fossils and fossilization; Fuels and fuel chemistry; Geochemistry; Petroleum detection; Petroleum, economic uses of; Petroleum extraction; Petroleum, history of exploration; Sedimentation; Syncline and anticline

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oil industry

oil industry, the business of discovering oil (petroleum), extracting it from the ground, refining it into a variety of products, and distributing it to the public. The development of the oil industry in the 19th and 20th cent. provided a source of energy that now supplies about two fifths of the world's energy needs as well as a raw material that chemical and petroleum industries refine into a number of essential chemicals and industrial products.

Early History

Petroleum seeping out of underground reservoirs has been collected and used for light throughout recorded history. In the 4th cent. AD the Chinese drilled for oil and natural gas, but in the 1850s, oil was still being recovered by skimming it off the tops of ponds. As whale oil became less abundant, producers looked for new ways to extract oil. Edwin Drake dug the first modern oil well in Titusville, Pa, hitting oil at 69.5 ft (21.2 m), touching off an oil rush in the area. (Most modern wells go down over 4,700 ft (1,432 m).) In 1861 the first oil refinery was set up.

Development of the Modern Industry

During the late 19th cent., many of the modern oil companies were created: John D. Rockefeller invested in a Cleveland oil refinery during the Civil War and in 1870 created Standard Oil, which refined about 95% of the United States' oil in 1880. In 1911, Standard Oil was declared an illegal monopoly and split into 34 companies, including Esso (renamed Exxon in 1972), Mobil, Chevron, Atlantic Richfield (later ARCO), and Amoco. Texaco (founded in 1902), Shell (1907), and British Petroleum (1909) were also established in this period. As the auto industry vastly increased the demand for gasoline refined from oil, oil companies expanded their search for new reserves. In the 1930s oil companies began exploiting a huge E Texas oil field that would eventually produce 4 billion barrels of oil. Chevron, Texaco, Exxon, and Mobil expanded their reserves by purchasing the rights to the extensive Saudi Arabian oil fields for only $50,000. In 1946 oil replaced coal as the world's most popular energy source.

Late-Twentieth-Century and Early-Twenty-First-Century Developments

In 1960 the Organization of Petroleum Exporting Countries (OPEC) was formed. Over the next decade, OPEC required that the major oil companies provide them with a larger percentage of the profits from their fields. After the oil embargo in 1973, OPEC boosted prices to $35 a barrel in 1981. The resulting energy crisis forced many developing countries to pay more for energy, negatively affecting Third World debt; industrialized countries implemented new measures to conserve and develop new sources of energy. Some new oil fields in Alaska and the North Sea were developed, boosting the world's oil reserves from 645.8 billion barrels in 1978 to 1,052.9 billion barrels in 1998.

With an abundant supply, oil prices dropped and stayed low through the 1990s, until 1999 when OPEC announced that it would cut production in order to increase oil prices worldwide. With the help of non-OPEC oil-producing nations, the organization was subsequently generally able to maintain prices between $20 and $30 a barrel, but world events, demand, and speculation have driven prices significantly higher, and in mid-2008 oil approached $150 before falling to nearly a third of that. Since 2010 oil prices have typically ranged between $80 and $110 a barrel. The utilization of hydraulic fracturing (often combined with horizontal drilling), to open up the exploitation of shale oil fields and to revive production in depleted fields, has contributed to increases in oil production in the United States, which has led to a corresponding drop in oil imports there.

Economies dependent on oil production remain subject to the gyrations of the market. The collapse of oil prices in the mid-1980s ruined many independent refiners and helped produce a recession in such states as Texas; it also hurt Mexico, Venezuela, and other oil-producing nations. In contrast, the rise in oil prices from 1999 to 2008 was responsible for economic growth in Russia, Venezuela, and other oil producers, but those nations once again found their economies and government spending threatened when prices plummeted in late 2008. Improved recovery methods combined with higher prices that justify more expensive extraction costs have rejuvenated production in some older oil fields, increased the estimates of reserves in existing fields, and made feasible the exploitation of deposits once considered uneconomical.

Many oil-producing nations in the Middle East and Latin America have set up their own refining operations since the 1970s, and state-owned oil companies in OPEC countries are now among the world's largest. Many large oil companies have diversified into chemicals, and oil prices are increasingly set on commodity trading exchanges such as the New York Mercantile Exchange. Beginning in the late 1990s, the industry saw increased consolidation as already large oil companies merged with each other, including Exxon (the largest U.S. oil company) with Mobil (the second largest; forming ExxonMobil), Chevron with Texaco and Unocal as Chevron, British Petroleum with Amoco and ARCO as BP, and Conoco with Phillips Petroleum as ConocoPhillips.


See A. Sampson, The Seven Sisters (1975); D. Yergin, The Prize (1991).

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