The oil industry is a multinational industry, and said to be one of the most vital to the global economy as a whole. "Crude oil" that is found underground cannot be directly utilized, as it contains many impurities, so it therefore requires extensive refining. Oil will then be transported through pipelines and oil tankers to processing facilities, and the products made out of it can then be marketed. All of these procedures together form the oil industry. The three major components of the oil, or petroleum, industry are upstream (exploration, extraction, and production), midstream (transport, storing, and raw bulk sales), and downstream (refinement, further processing, ultimate commercial consumption). Oil serves a wide range of uses, and not only as an energy source to fuel transportation, heavy industry, heating, and power production. The raw materials produced from crude oil are used in many chemical products, including pharmaceuticals, solvents, pesticides, fertilizers, and so on. As such, it is indispensable to many other similarly vital industries.
The United States is the number one leading oil consumer in the world, followed by China, Japan, India, and Saudi Arabia. According to the International Energy Agency (IEA), in 2012 over 64% of the world's oil production came from ten countries: Russia (13%), Saudi Arabia (13%), the United States (9%), China (5%), Iran (4%), Canada (4%), the United Arab Emirates (4%), Venezuela (4%), Kuwait (4%), and Iraq (4%). Venezuela is also the country that has the world's largest proven oil reserves, followed by Saudi Arabia, Canada, Iran, and Iraq.
Oil is found in underground pockets called reservoirs. In some places, oil bubbles to the surface of the earth, though most oil is trapped in underground oil reservoirs. While most of the oil in a reservoir is unable to be extracted, the part that can be extracted and refined is counted as that particular oil reservoir's oil reserves, which can then be drilled by pumps. After being extracted, the crude oil needs to be refined and the impurities have to be removed by heating the crude oil in a distillation tower. Useful oil then is collected and transported by pipeline, ocean vessels, and trucks to different locations, either to be used directly or further processed. Today, a variety of techniques are becoming increasingly popular, especially hydraulic fracturing ("fracking"), and offshore drilling.
Oil has been produced and utilized for over 5,000 years. In general, it has been widely used since early human civilization, especially in incendiary warfare. It slowly evolved into an important energy source to fuel the world economy. Since the 18th Century, it has been increasingly used for activities vital to human survival, such as heating, cooking and lighting. While the oil industry as we know it today was pioneered by the United States in the 18th and 19th Centuries, following World War II the countries of the Middle East took the lead in oil production. Countries with massive oil reserves often use them as leverage to achieve political purposes through economic pressure, and many of these actions have triggered major disputes and upheaval globally.
Because the oil industry is vital to the world economy, many governments provide heavy public subsidies to oil companies, including major tax breaks at every stage of oil exploration and extraction. At the same time, however, there are widespread public concern and dissatisfaction, especially in OECD countries, toward the cooperation between governments and oil companies, as oil industry operations have been responsible for water pollution and severe air pollution. Environmental organizations have been advocating to reduce oil production and consumption by using renewable energy sources. The burning of fossil fuels, especially petroleum-based products, has been strongly tied to climate change, and the oil industry has the potential to pollute the environment on every level. Plastic products are also a major source of waste that takes very long to degrade. Furthermore, before the products are even used by consumers, drilling operations and pipelines interfere directly with the habitats they are built upon, and transport vessels risk leaking oil into soil and water. For all of these reasons, people, business, and governments the world over are seeking alternative to oil and the products created from it.
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