What is crude oil?
Definition
Crude oil is a natural petroleum product consisting of deposits of hydrocarbons and other organic materials. One type of fossil fuel, crude oil, is refined to create usable products including gasoline, diesel, and many other forms of petrochemicals. It is a non-renewable resource, which means it cannot be replaced naturally at the rate we consume it and is therefore a finite resource.
Understanding Crude Oil
Crude oil is usually obtained by drilling, where it is often found along with other resources, such as natural gas (lighter and therefore located above crude oil) and saltwater (more dense and submerged inside) below).
After extraction, crude oil is refined and transformed into various forms, such as gasoline, kerosene and asphalt, for sale to consumers.
Although often referred to as "black gold", crude oil has a wide range of viscosity and its color can vary from black to yellow depending on its hydrocarbon composition. Distillation, the process of heating oil and separating it into its different components, is the first step in the refining process.
Although fossil fuels such as coal have been mined for centuries, crude oil was first discovered and developed during the Industrial Revolution, and industrial uses of crude oil were discovered. developed in the 19th century. Newly invented machines have revolutionized the way we work and they depend on these resources to function.
Today, the global economy is largely dependent on fossil fuels such as crude oil and demand for these resources is often politically destabilizing, as a few countries control large reservoirs. best. Like any industry, supply and demand strongly influence crude oil prices and profits. The United States, Saudi Arabia and Russia are the main oil producers in the world.
In the late 19th and early 20th centuries, the United States was one of the world's leading oil producers, and American companies developed technology to turn oil into useful products such as gasoline. During the middle and later decades of the 20th century, oil production in the United States dropped sharply and the United States became an energy importer.
Its main supplier is the Organization of the Petroleum Exporting Countries (OPEC), established in 1960, bringing together the largest holders (by volume) of crude oil and natural gas reserves in the world. world. The OPEC countries thus had considerable economic leverage in determining the supply, and thus, the price of oil in the late 1900s.
At the beginning of the 21st century, the development of new technologies, in particular, is hydro-fracking, which created a second century. energy boom in the United States, largely reducing the importance and influence of OPEC.
High dependence on fossil fuels is considered to be one of the main causes of global warming, a topic that has attracted attention in recent decades. Risks around oil drilling include oil spills and ocean acidification, which damages ecosystems. In the 21st century, many manufacturers have begun to create products that rely on alternative energy sources, such as electric cars, homes powered by solar panels and communities powered by solar panels. wind turbines.
Gist
Crude oil is a raw natural resource that is extracted from the earth and refined into products such as gasoline, jet fuel, and other petroleum products.
Crude oil is a global commodity traded in markets around the world, both as spot oil and through derivatives contracts.
Many economists consider crude oil to be the world's most important commodity because it is currently the main source of energy production.