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?

How Much Oil and Gas Has Been Found in 2020?

Global conventional oil and gas discoveries already exceed eight billion barrels of oil equivalent (boe) and are projected to settle at around ten billion boe by the end of the year, according to a new Rystad Energy analysis. 

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Global discovered oil and gas resources set to reach 10bn boe in 2020

Despite concerns that COVID-19 could drive down discovered volumes to their lowest levels in decades, exploration activity has been resilient this year. Found resources already exceed 8bn boe and are projected to settle at around 10bn boe by year-end, according to Rystad Energy.About 3.75bn boe, or ...

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EU Council authorises sanctions targeting Turkish oil and gas sector

The European Union (EU) has ramped up pressure on Turkey to stop exploratory oil and gas drilling in Mediterranean waters that EU member state Cyprus claims is within its exclusive economic zone (EEZ), reports Keith Nuthall. Turkey's state-owned oil company TPAO (Türkiye Petrolleri Anonim Ortaklığı)...

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Transition deal critical for UK oil and gas sector as recovery could take years

Oil and Gas UK (OGUK) has warned that it could take up to three years to restart many of the UK’s oil and gas projects lost due to the impact of the coronavirus pandemic and commodity price downturn. The warning comes in its Autumn Snapshot, which provides a business outlook for 3Q2020.The report fi...

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Fragile oil and gas interests at stake for Azerbaijan, Russia and Turkey in Nagorno-Karabakh

Nagorno-Karabakh’s close proximity to key Azeri oil and gas infrastructure means that there will be more at stake if the region’s conflict with Armenia escalates further and jeopardises key export pipelines. Rystad Energy believes potential disruptions could benefit Russian gas exports while weakeni...

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Events and training

EI LIVE free webinar | Energy Systems and Digital Technologies

Online bookings are now closed. Please contact comms@energyinst.org if you would like to secure a spot on the webinar.

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EI LIVE | IP Week 2021

For more information, please visit ipweek.co.uk.Book your place to one of the biggest events in the energy sector and get together virtually with over 1,500 industry professionals from over all over the world to hear the latest news and updates, debate key issues, and network to form new partne...

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EI LIVE | Energy Storage Fundamentals for Energy Security - March 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 from fossil fuel ba...

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EI LIVE | Asset Management

EI Knowledge Partner: Future-proofing asset management through latter stages of production operating life into a net zero energy transition model towards greener, carbon neutral industrial model.Please note that registration closes at 17:00 on 9 March 2021

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Economics of Oil & Gas Industry - Nigeria - March 2021

This 2-day course introduces the economics that drive the oil and gas industry. Participants in this course will learn about the oil and gas value chain and will consider the costs, revenues and risk associated with various stages in the chain. Basic economic principles such as Net Present Valu...

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Technical guidance publications

Decommissioning within the offshore UK oil and gas industry: a practical guide to worker health protection

The primary focus of this technical publication is to highlight and describe the potential health hazards and risks to workers involved in the decommissioning of offshore oil and gas structures, and explain how these risks are potentially magnified during decommissioning. Health planning, management...

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Guidelines for the integrity management of flare tips and ancillaries

This document has been developed to provide guidance for operators and suppliers for the establishment and maintenance of an integrity management system (IMS) for flare tips and associated ancillaries for offshore and upstream plants. This includes recommendations on controls and procedures necessar...

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HM 86. Guidelines for measurement of crude oil loaded at offshore installations

This document focuses on the loading of ships offshore (i.e. not alongside a berth). This type of operation has become much more common with the development of many floating production storage and offloading (FPSO), floating storage offloading (FSO), and floating storage unit (FSU) facilities.Althou...

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Guidelines for the design and operation of petrol vapour emission controls at distribution terminals

This publication supersedes the Guidelines for the design, installation and operation of petrol vapour emission controls at distribution terminals (4th edition), published October 2014.This publication has been prepared by the Vapour Recovery Working Group of the EI’s Distribution and Marketin...

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Guidelines for the identification and management of environmental barriers

This document supersedes the previous Guidelines for the identification and management of environmentally critical elements, which allowed operators to develop a practical approach to major hazards to the environment. This revised document provides a list of key points to ensure regulatory expectati...

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