Oil and natural gas remain the world's leading fuels, accounting for nearly 55% of global energy consumption

Oil and natural gas are formed from decaying plant and animal remains that became buried within layers of the earth and subjected to heat and pressure over millions of years. These two types of fossil fuels have been the world’s primary sources of energy for decades. They have enabled advances in quality of life and in all sectors of the economy, from residential lighting, cooking and heating to transportation and industrial manufacturing. However, the low carbon transition has put the oil and gas industry under pressure as these fuels are two of the main sources of greenhouse gases. The industry is associated with environmental disasters such as oil spills, and the prices of the two fuels – especially oil – are highly volatile with fluctuations directly impacted by political and socioeconomic events. Nevertheless, more than 100 countries currently produce oil and/or natural gas and the two fuels are expected to maintain their importance across the energy sector for many decades to come.

The production of oil and natural gas are often coupled as the two are typically found together in nature. The industry is commonly divided into three main operational sectors: upstream, midstream and downstream. The upstream sector incorporates the exploration and extraction of crude oil and natural gas reserves, while midstream focuses on transporting and storing the extracted products. The oil and natural gas then reach downstream processing facilities where they are refined, distributed and sold to the end customer. The product that reaches the end customer can take a number of forms including natural gas, liquefied petroleum gas (LPG), petrol, diesel fuel, jet fuel, heating oil, kerosene, asphalt and other petrochemicals. Several trends are currently impacting the future outlook of the oil and gas industry. The use of natural gas has increased across all economic sectors over the last few decades since natural gas – often viewed as a bridge fuel towards a low carbon energy system – burns cleaner than oil or coal for electricity generation. The switch to natural gas is becoming more widespread with the proliferation of the technology to liquify it (to LNG) for transport. Developments in shale gas and oil production have also greatly increased supply in the US, which has had implications in global oil, and increasingly LNG markets. Given a growing world population and continued demand for oil and gas products, discoveries of new deposits and advances in production technology will determine availability of supplies. Developments in carbon capture, use and storage (CCUS) will also impact the position of oil and natural gas in the long-term energy mix.

You can further explore the three sectors by clicking the links below:

Learn more about oil and gas extraction by exploring records published on our Energy Matrix.

For the latest news and articles on exploration and production read Petroleum Review.

Find the latest oil and gas consultations and policies in our Policy Milestones Calendar.

What's new?

Petrochemicals to dominate upcoming project starts across China’s oil and gas value chain

China is expected to see 512 petrochemical projects commence operations over 2021–2025, accounting for 76% of the total project starts across the country’s oil and gas value chain. In petrochemicals, newbuild projects dominate the project starts, accounting for more than 90%, while the rest are expa...

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North Sea Transition Deal may allow new oil and gas exploration

Britain’s oil and gas sector is to be supported through the transition to a low carbon future under the government’s new North Sea Transition Deal agreed with the industry. The Deal concentrates on reducing carbon emissions from extracting oil and gas, rather than those associated with its end ...

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Ineos Energy to sell Norwegian oil and gas business to PGNiG

Ineos Energy is to sell its oil and gas business in Norway to Poland’s PGNiG for $615mn. The deal includes all Ineos’ oil and gas interests in production, licences, fields, facilities and pipelines on the Norwegian Continental Shelf (NCS).Ineos E&P Norge currently produces around 33,000 boe...

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Ineos to acquire Hess oil and gas interests in Denmark

Ineos E&P, part of Ineos Energy, is to acquire Hess Denmark for $150mn.As part of the deal, Ineos will acquire 61.5% of the Syd Arne oil field, currently operated by Hess, which complements the 36.8% share Ineos already holds in the field. It will also acquire 4.8% of the Solsort field, which is...

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Impact of Myanmar coup on oil and gas

New upstream projects worth $2bn up until 2030 that are yet to take final investment decision (FID), including the A6 project, now risk further delay following the military coup in Myanmar at the start of February, according to Wood Mackenzie Research Associate Saloni Kapoor.‘Key developments such a...

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Events and training

EI LIVE free webinar |Human Factors Safety Critical Task Analysis

A free EI Live webinar, providing an introduction and overview of Human Factors Safety Critical Task Analysis (SCTA) methodology.

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EI LIVE free webinar | People, Project & Partnership at 60°North

The Shetland Islands, located at 60°North has always been an outward-looking place with a mindset to match. By geological design, Shetland has been a strategic location for fishing, aquaculture and oil & gas for decades.

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EI LIVE | Energy Storage Fundamentals for Energy Security - May 2021

<p> This 2-day virtual blended training course will allow you to gain a comprehensive understanding of energy security awareness and learn how to achieve energy security at national and power generator levels. It provides knowledge of energy storage systems as we transition to low carbon ...

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EI LIVE | Introduction to LNG - May 2021

This 4-day training course provides an introduction to the LNG chain. Suitable for students who are new to the LNG sector and/or those with a non-technical background.

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Technical guidance publications

EI Research Report: Determination of recalibration intervals for fiscal metering measurements (HM 1803)

This report provides an overview of the four currently identified methodologies for determining calibration intervals:− Calendar-based− Condition-based− Performance-based− Risk-basedFor each method, the procedure for implementing the methodology is described, the advantages a...

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Guidelines for in-service management of passive fire protection coating systems

This document provides guidance on in-service management of passive fire protection coatings that have been applied to components such as fire barriers, key structural elements and items of process equipment to provide a predetermined level of protection from a given fire and/or explosion event.Guid...

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Guidance on managing obsolescence and upgrading industrial automation and control systems (IACS)

This publication provides information and guidance on the factors that should be considered in the successful management of obsolescence of an IACS, by providing a practical approach and suggested courses of action. Each and every IACS is different as a result of its unique use, and varies depending...

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Model Code of Safe Practice Part 9: Liquefied petroleum gas - large bulk storage

This technical publication provides good practice guidance on the layout, design, operation and integrity management for bulk LPG storage installations storing volumes of LPG that are typically subject to Seveso III Directive, like those encountered at fixed installations atmanufacturing facilities ...

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Guidance for integrity root-cause analysis

This publication helps the integrity community to learn from low criticality incidents.The guidance introduces the topic of root-cause analyses (RCA) and how to address and capture lessons from 'more frequent - low consequence' incidents within the integrity management system. Along with its compani...

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