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How Was Oil Formed?

Oil was formed from the remains of animals and plants (diatoms) that lived millions of years ago in a marine (water) environment before the dinosaurs. Over millions of years, the remains of these animals and plants were covered by layers of sand and silt. Heat and pressure from these layers helped the remains turn into what we today call crude oil. The word "petroleum" means "rock oil" or "oil from the earth."

Three images,  about Petroleum & Natural Gas Formation. Adapted from the National Energy Education Development Project.
              The first image is about the Ocean 300 to 400 million years ago. Tiny sea plants and animals died and were buried on the ocean floor. Over time, they were covered by layers of sand and silt.
              The second image is about the Ocean 50 to 100 million years ago. Over millions of years, the remains were buried deeper and deeper. The enormous heat and pressure turned them into oil and gas.
              The third image is about Oil & Gas Deposits. Today, we drill down through layers of sand, silt, and rock to reach the rock formations that contain oil and gas deposits.

Products Made from a Barrel of Crude Oil

Did You Know Crude Oil Can Be Sweet or Sour?

Crude oil is called "sweet" when it contains only a small amount of sulfur and "sour" if it contains a lot of sulfur. Crude oil is also classified by the weight of its molecules. "Light" crude oil flows freely like water, while "heavy" crude oil is thick like tar.

After crude oil is removed from the ground, it is sent to a refinery by pipeline, ship, or barge. At a refinery, different parts of the crude oil are separated into useable petroleum products.  Crude oil is measured in barrels (abbreviated "bbls").

A 42-U.S. gallon barrel of crude oil provides about 45 gallons of petroleum products. This gain from processing the crude oil is similar to what happens to popcorn, which gets bigger after it is popped.

This graphic illustration of a barrel 
            shows the percentage of products that are made from 44 gallons of crude oil for 2008: 18.56% gasoline; 1.72% liquefied 
            petroleum gas (LPG); 1.68% heavy fuel oil (residual); 7.01% other products; 4.07% jet fuel; 1.38% other distillates 
            (heating oil); and 10.31% diesel fuel.
Click to enlarge »

More data »

Note: A 42-U.S. gallon barrel of crude oil yields about 45 gallons of petroleum products.

Last Updated: June 17, 2011

Petroleum Statistics

(2011 data except where noted)

Supply

U.S. Petroleum Production (crude oil, NGPL, and other oils) 7,841,000 barrels/day
U.S. Crude Oil Production
5,659,000 barrels/day
U.S. Crude Oil Imports
8,921,000 barrels/day
U.S. Petroleum Product Imports
2,438,000 barrels/day
U.S. Net Petroleum Imports
8,436,000 barrels/day
Dependence on Net Petroleum Imports
45%
Top U.S. Crude Oil Supplier
Canada — 2,207,000 barrels/day
Top U.S. Total Petroleum Supplier
Canada — 2,706,000 barrels/day
U.S. Crude Oil Imports from OPEC
4,195,000 barrels/day
U.S. Petroleum Product Imports from OPEC
339,000 barrels/day
State Ranking of Crude Oil Production Texas — 1,146,000 barrels/day
Top U.S. Producing Companies
BP PLC — 237 million barrels (2009)
Top U.S. Oil Fields by Production, Appendix B, Table B1
Prudhoe Bay, AK (2009)
Top Oil Producing Country
#1 — Russia (9,934,000 barrels/day) (2009)
Top Oil Consuming Country
#1 — United States (18,771,000 barrels/day) (2009)

Consumption and Disposition

U.S. Petroleum Consumption
18,835,000 barrels/day
U.S. Motor Gasoline Consumption
8,736,000 barrels/day (377 million gallons/day)
Share of U.S. Oil Consumption for Transportation
71% (2011)
U.S. Total Petroleum Exports
2,924,000 barrels/day

Prices

Crude Oil Domestic First Price (wellhead price)
$95.73/barrel
Motor Gasoline Retail Prices (U.S. City Average)  
$3.58/gallon
Regular Grade Motor Gasoline Retail Prices (U.S. City Average)  
$3.53/gallon
Premium Motor Gasoline Retail Prices (U.S. City Average) 
$3.79/gallon
Federal Motor Gasoline Tax
18.4 cents/gallon
U.S. Average Home Heating Oil Price (2010)
$2.80/gallon (excluding taxes)

Refining and Reserves

Number of U.S. Operable Petroleum Refineries
148
U.S. Refiners Ranked Capacity (Jan. 1, 2011) #1 — Baytown, Texas (ExxonMobil) 560,640 barrels/day
Top U.S. Petroleum Refining States (Jan. 1, 2011) #1 — Texas 4,659,000 barrels/day
U.S. Proved Reserves of Crude Oil as of December 31, 2008
20,682 million barrels
U.S. Strategic Petroleum Reserve
696 million barrels (2011)

International

Total World Oil Production
86,954,000 barrels/day (2011)
Total World Petroleum Consumption
87,135,100 barrels/day (2010)

Measures

Gallons of Oil per Barrel
42
Barrels of Oil per Metric Ton (U.S.)
7.33

Last Updated: April 23, 2012