Crude oil is a naturally occurring liquid unrefined fuel primarily made of hydrogen
and carbon found beneath the earth's surface in underground reservoirs. Crude oil can be refined
for various purposes like vehicles, electricity generation and other petrochemical products. It
is a non-renewable asset and cannot be replenished artificially to meet its rapidly growing demand.
Crude oil is stored in underground reservoir rocks,
which contain ample storage space in the form of porosity and sufficient
permeability so that the deposited crude oil can migrate within the reservoir.
The extraction of crude requires giant oil rigs to drill holes up to the reservoir depth
and extract the crude using primary, secondary or EOR (Enhanced oil recovery) methods.
Conventional oil can be extracted at normal reservoir pressure and temperature conditions,
allowing crude oil to flow through pipelines due to pressure differences.
Conversely, unconventional oil is hard to extract using the conventional method due
to tight reservoir conditions. Special methods like hydrofracturing and horizontal well drilling
are used to extract crude oil for unconventional reservoirs.
After crude oil is removed from the ground, it is sent to a refinery,
where different parts of the crude oil are separated into useable petroleum products. These
petroleum products include gasoline, distillates such as diesel fuel and heating oil,
jet fuel, petrochemical feedstocks, waxes, lubricating oils, and asphalt.
Chemically, hydrocarbons are mainly composed of hydrogen and carbon,
with an aggregate percentage of 98 percent. Aside from that, different components like sulphur,
oxygen and nitrogen are present in small amounts.
The composition of crude oil may vary depending on its place of origin and the pressure-temperature
condition which formed the crude oil. Light oil can contain up to 97 percent hydrocarbons,
while heavy oil might have only 50 percent hydrocarbons.
The presence of sulphur in crude oil is considered an impurity as it corrodes pipelines and other
refining equipment. If a crude oil contains more than 0.5 percent sulphur, it is known as sour oil;
if the percentage of sulphur is less than 0.5 percent, it is considered sweet oil.
The prices and demand for sweet oil in the international market are higher than sour oil.
There are three main categories of crude oil: West Texas Intermediate (WTI),
Brent Crude, and OPEC Reference Basket that set the pricing benchmark for global oil suppliers.
According to U.S. Energy Information Administration,
in 2021, U.S. petroleum consumption averaged about 19.78 million barrels per day,
which included about a million barrels of biofuels per day.
U.S. total petroleum consumption was about 8 percent higher in 2021 than the level in 2020.
Lastly, speaking about the highest price of crude oil, historically,
Crude oil reached an all-time high of 147.27 in July 2008.