Back to Articles

Where Does Crude Oil Come From? And 5 Other Things You Should Know About The Earth’s ‘Black Gold’

Chart Industries | November 17, 2023

Crude oil. Often portrayed as the coagulated thick black liquid that spurts from the ground at oil rigs. Gloppy and unrefined straight from the earth. The oil man's black gold.

It gets this nickname ‘black gold’ from the monumental amount of products that can be processed from unrefined crude oil.

Gasoline and diesel fuel to power our transport. Heating oil to warm our homes. And other petroleum products such as naphta, waxes, and lubricating oils that ultimately become a part of almost every product we produce and consume.

But where does it come from? We answer that, and 5 other things you should know about crude oil. But first, let’s get some facts.

The Fast Facts On Crude Oil

Crude oil is a naturally occurring fossil fuel - meaning it comes from the remains of dead organisms. Crude oil is made up of a mixture of hydrocarbons - hydrogen and carbon atoms. It exists in liquid form in underground reservoirs in the tiny spaces within sedimentary rocks. Or it can be found near the surface in oil sands.

It is often found alongside natural gas and saline water. Crude oil is often interchangeably referred to as petroleum. This is because petroleum includes both the unrefined crude oil as well as refined petroleum products. It is non-renewable - once it’s gone it’s gone and cannot be easily replaced.

The petroleum products that can be processed from one barrel of crude oil:

Crude Oil Black Gold

Where does crude oil come from?

Crude oil is formed from the remains of dead organisms (diatoms) such as algae and zooplankton that existed millions of years ago in a marine environment.

These organisms were the dominant forms of life on earth at the time.

FYI: Dinosaurs weren’t around at this stage. So any of those stories you’ve heard that fossil fuel is from dinosaurs was simply not the case.

As they lived these organisms absorbed energy from the sun and stored it as carbon molecules within their bodies. Once they died their remains sank to the bottom of the oceans or riverbeds and were buried in layers of sand, mud and rock.

Over millions of years, the remains were buried deeper and deeper under more sediment and organic materials. The enormous pressure, high temperatures, and lack of oxygen transformed the organic matter into a waxy substance called kerogen. With even more heat, pressure, and time the kerogen undergoes a process called catagenesis which transforms the kerogen into hydrocarbons.

Different combinations of pressure, heat, and the original composition of organic material will determine the type of hydrocarbon formed. In this case, the hydrocarbons form crude oil. Other examples are asphalt if the temperature is lower, and natural gas if the temperature is higher. After the oil is formed it moves through tiny pores in the surrounding rock from an area of high pressure to low pressure, this is often upwards. Some oil might make it all the way to the surface where it pools, in other cases the oil will get trapped under impermeable layers of rock or clay where it will form underground reservoirs.

How deep underground is crude oil?

Oil seemingly keeps getting deeper and deeper. But that isn’t the total truth. In reality, the oil if anything has only ever moved upwards. It is only the drilling for the oil that keeps needing to go deeper, and further, as the higher up and easier to reach oil reservoirs are used up. The earliest year where data is available, 1949, shows the average depth of oil wells drilled was 3,500 feet.

By 2008 the average rose to 6,000 feet. And the deepest well currently existing is a massive 40,000 feet deep. That’s 11,000 feet more than the height of Mount Everest. Not all drilling is straight down, when they say depth it means how far they had to drill, sometimes this means covering huge horizontal distances too.

How do you know where to find oil?

Geologists are the masters of locating oil. Often called oil exploration, geologists will look for an area that ticks all the boxes of finding an oil trap aka striking (black) gold. Oil is often found in the vast underground reservoirs where ancient seas were once located. This can either be beneath land or out in the ocean below the seabed.

During the earlier years of oil mining, the geologists would study the soil, surface rock, and other surface features to determine if oil may be lying below. Later came satellite imagery, along with more technological advances such as gravity meters, means to test the Earth’s magnetic field, and ‘sniffers’ that detect the smell of hydrocarbons.

The most common way used today is to generate shock waves that pass through the rock layers and reflect back to the surface where they can be interpreted for signs of oil traps. This is done with seismic source devices such as a compressed-air gun, a thumper truck, or explosives . They then mark the location using GPS coordinates on land or by marker buoys on water.

Which country has the most oil?

According to the most recent data from the IEA, an average of 100 million barrels of oil were produced per day worldwide in 2018. That includes 32 million barrels a day of crude oil only, and 68 million barrels of crude oil, condensates, NGLs and oil from non-conventional sources.

The top five oil-producing nations are responsible for over half of the world’s production of crude oil. The top five oil producing countries in 2019 to date are:

  • USA - 17 million barrels per day
  • Russia 12 million barrels per day
  • Saudi Arabia 10 million barrels per day
  • Canada 6 million barrels per day
  • Iraq 5 million barrels per day

How much oil is left in the world?

With production still on the rise as it has been for decades, experts are trying to calculate when, if ever, oil will run out. It isn’t a simple science - because well, it is still unknown exactly how much oil is trapped in the earth in places unexplored.

However BP have made an estimate. The estimate comes from the amount of oil each country believes they can produce from “proved reserves” (the reserves they currently have access to), using their existing technology, while still turning a profit, at the current rate of extraction. And the year they give for the end of oil production if things remain the exact same as they are today - 2067. Yep, only another 48 years.

That means without finding more reservoirs, reducing our consumption, or developing new technology, oil production could cease in 2067. But I wouldn’t put that date down in permanent marker. Every previous doom-date prediction made has always been pushed back.

What happens if we run out of oil?

As Charles Darwin stated, to survive we must be able to adapt to change. Not to say we can’t survive without oil, but the consequences of the end of oil production could force modern society as we know it to change drastically. We depend on oil for so much more than you might even realise.

Oil is present in almost every single part of our lives from the transport and production of food, clothing, materials, pharmaceuticals, and the plastics used to make a whole plethora of products. The impact of how drastic this change may be will depend heavily on the rate of decline and the development and adoption of oil alternatives.

In terms of the rate of decline, that will always be a hard one to measure. With new techniques, such as enhanced oilfield recovery, and new locations becoming viable oil may not be in decline for many years yet to come - and when it does come I can’t imagine it will be such a surprise to cause a staggering decline that doomsday preppers predict.

However, there is a possibility that oil prices will rise higher due to more complicated and expensive practices being required to source and extract along with the increase in supply and demand. Speaking of supply and demand, that has consistently been rising for the last decade and even with all the environmental concern, it is yet to slow down with a growth forecast of 1.3 million barrels of oil to be produced in 2020. It is more likely then, that consumers will begin to look for more cost-effective alternatives if prices rise. Or, more efficient ways to produce and refine.

The future of oil seems like it won’t be going anywhere in a hurry. It will more likely be a matter of our hand being forced than a global choice to change our ways as oil is just so essential to everyday life as we know it. But it is clear that we either need to research alternative resources. Or use our current resources even more efficiently than ever before.

Howden equipment is used across oil & gas processes including refinery, petrochemical, production, and transport. We strive to produce innovative products and systems to ensure we match and exceed environmental standards all while delivering the results you deserve.