Petroleum

What is crude oil and what are petroleum products?

We call crude oil and petroleum fossil fuels because they are mixtures of hydrocarbons that formed from the remains of animals and plants (diatoms) that lived millions of years ago in a marine environment before dinosaurs existed. Over millions of years, the remains of these animals and plants were covered by layers of sand, silt, and rock. Heat and pressure from these layers turned the remains into what we now call crude oil or petroleum. The word petroleum means rock oil or oil from the earth.

Crude oil and other hydrocarbons exist in liquid or gaseous form in underground pools, or reservoirs, in tiny spaces within sedimentary rocks and near the earth’s surface in tar (or oil) sands. Petroleum products are fuels made from crude oil and the hydrocarbons contained in natural gas. Petroleum products can also be made from coal, natural gas, and biomass.

What petroleum products are made from crude oil?

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.

A U.S. 42-gallon barrel of crude oil yields about 45 gallons of petroleum products in U.S. refineries because of refinery processing gain. This increase in volume is similar to what happens to popcorn when it is popped. A corn kernel is smaller and more dense than a popped kernel. The amount of individual products produced varies from month-to-month and year-to-year as refineries adjust production to meet market demand and to maximize profitability.

Petroleum refineries process crude oil into many different petroleum products. The physical characteristics of crude oil determine how the refineries turn it into the highest-value products.

Not all crude oil is the same

The physical characteristics of crude oil determine how refineries process it. In simple terms, crude oils are classified by density (API gravity) and sulfur content. Less dense (lighter) crude oils (with higher API gravity) generally have more light hydrocarbons. Refineries can produce high-value products such as gasoline, diesel fuel, and jet fuel from light crude oil with simple distillation. When refineries use simple distillation on denser (heavier) crude oils (with lower API gravity), they produce low-value products. Heavy crude oils require additional, more expensive processing to produce high-value products. Some crude oils also have a high sulfur content, which is an undesirable characteristic in both processing and product quality.

Refineries use more than just crude oil

In addition to crude oil, refineries and blending facilities add other oils and liquids during processing to produce the finished products that are sold to consumers. These other oils and liquids include:

• Liquids that condense in natural gas wells (called lease condensates)
• Natural gas plant liquids from natural gas processing
• Liquefied gases from the refinery
• Unfinished oils that are produced by partially refining crude oil, such as naphthas and lighter oils, kerosene and light gas oils, heavy gas oils, and residuum

Refineries and blending facilities combine various gasoline blending components and fuel ethanol to produce the finished motor gasoline sold in the United States. They may also add other biofuels to petroleum fuels to make blends of biomass-based diesel, jet fuel, and heating oil.

Refining output is larger than input

The total volume of products that refineries produce (output) is greater than the volume of crude oil that refineries process (input) because most of the products they make have a lower density than the crude oil they process. This increase in volume is called processing gain. The average processing gain at U.S. refineries was about 6.3% in 2023. In 2023, U.S. refineries produced an average of about 45 gallons of refined products for every 42-gallon barrel of crude oil they refined.