From the Reservoir to the Forecourt: How Does Oil Reach Consumers?

Oil is a resource people the world over rely on to power their vehicles, appliances, and other products, and is also used in the manufacture of a plethora of goods that people on every continent use on a day-to-day basis. But how is this material transferred from man-made wells to facilities across the globe? The process can be boiled down to a few simple steps: extraction, transportation, processing, and delivery.

Extraction

The first step to extracting oil from the ground is figuring out where it can be found. Geologists working in the oil industry need to be able to identify potential oil reservoirs and successfully plan excavations accordingly in order to meet the global consumer demand for oil. Once potential oil wells are found, the surrounding rock is tested and – if it passes the standards met for digging – a well is drilled, allowing for easier refinement and transportation. This entails setting up pipelines and production materials necessary for extracting oil for refinement. In oil industry vernacular, this division of the refinement process is referred to as ‘upstream’.

Transportation

After being extracted from the reservoir, oil is often transferred to the ‘midstream’ portion of the process, or transported by tankers and pipelines to a dedicated refinery. On occasion, oil is refined on-site near the well it was drawn from for local trading and usage. Most often, though, pipelines – especially those secured with cast steel lifting bails and other types of thread protectors – are the preferred method of transport. Repair is simple enough and the risk of losing oil is much lower than it is by truck, railway, or other land-based transportation mediums. The main drawback is that pipelines cannot be easily moved and adjusted to accommodate changes in demand for oil. There are also political factors to consider when oil pipelines cross international borders.

Oil tankers are probably the most reliable land-based alternative to pipelines. They’re highly flexible and can still meet the massive shipping demands of oil refineries. However, tankers cannot always take the easiest route to their respective destinations due to specific choke points in oil-rich regions. For example, the Straits of Hormuz, where 17 million barrels of oil must pass through on a daily basis, is a highly volatile region for transport. This region is especially dangerous due to the potential risk of stumbling across mines should Iran take action upon the threats that were made a few years ago.

Processing

Once crude oil is sent in for refining, it can finally be made into a number of products for use and consumption. As one can guess, refining and processing of oil is often referred to as ‘downstream’ in the oil industry. In short, crude oil is separated based on its hydrocarbons and may have to be processed further for such substances as jet fuel. The amount of processing needed also depends on the quality and purity of the crude oil before it is separated into fractions.

Delivery

Once oil is refined to meet quality and usability standards, it’s time to transport it for manufacturing. Oil tankers and pipelines are often relied upon to accomplish this task, carrying tons of oil to storage facilities, processing plants, and other locations as needed to prepare it for consumer use. Many companies, especially those who specialize in retail sale of oil-based products and by-products, keep inventory of how much they have in storage so as to use only what they need as it is needed.

Understanding how oil is refined and transported is crucial to understanding its impact on not only the global economy, but on Earth itself. This process has been streamlined in such a way to meet consumer demands quickly and efficiently, and has done so for decades. The ubiquity of it is such that it’s hard to imagine a world without it up to this point.

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