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Oil, gas and coal: how they form, are found, moved and priced: Key terms, quiz and sources

Understanding Energy / Module 6: Oil, gas and coal: how they form, are found, moved and priced Wrap-up

Oil, gas and coal: how they form, are found, moved and priced: review

Key terms

Hydrocarbon
A molecule made only of carbon and hydrogen; crude oil and natural gas are mixtures of them.
API gravity
An industry scale of crude oil density; higher numbers mean lighter oil.
Sweet and sour crude
Low-sulfur and high-sulfur crude oils respectively; sour crude needs more treatment.
Kerogen
Waxy organic matter in source rock that cracks into oil and gas when heated.
Oil window
The temperature range, about 65-150 degrees C, at which kerogen turns into oil.
Trap
A rock structure, such as an anticline or salt dome, that stops oil and gas migrating upwards.
Coal rank
The degree of coalification, from peat through lignite and bituminous coal to anthracite.
Thermal coal
Coal burned for heat, mainly in power stations.
Coking coal
Coal that forms strong coke when heated without air, used in blast-furnace steelmaking.
Seismic survey
A method of imaging rock layers by recording reflected sound waves.
Recovery factor
The share of the oil in place that is actually produced from a reservoir.
Hydraulic fracturing
Pumping water, sand and additives at high pressure to crack tight rock so oil and gas can flow.
Catalytic cracking
A refinery process that uses a hot catalyst to break heavy molecules into lighter fuels.
Reserves
The known part of a resource that can be produced profitably with current technology and prices.
Reserve-to-production ratio
Reserves divided by annual output; the years reserves would last at today's rate.
Chokepoint
A narrow sea passage, such as the Strait of Hormuz, through which a large share of energy trade must pass.
LNG
Natural gas cooled to about minus 162 degrees C, shrinking its volume about 600 times for shipping.
Combined-cycle plant
A power station in which a gas turbine's exhaust raises steam for a second turbine, reaching about 60% efficiency.
Methane leakage
Unburned natural gas escaping from wells, pipelines and equipment, a potent greenhouse gas.

Try it in the table

  • Open the 'Crude oil' tile and compare the benchmark prices it shows with the 2026 IEA figures in Part 4. How far had prices moved from the April 2026 peak near $144 a barrel?
  • On the 'Natural gas' tile, compare the price in Asia with the US price. Use the LNG chain in Part 5 to explain how much of the gap is liquefaction, shipping and regasification.
  • Open 'LNG chain' and find the energy lost in liquefaction. Check it against the 8-12% shown in the flow figure, and work out how many cubic metres of gas a 170,000 cubic metre LNG carrier delivers.
  • Compare the 'Thermal coal' and 'Coking coal' tiles: their prices, their main exporters and their main buyers. Which one is India more dependent on importing, and why?
  • Open 'Oil and product pipelines' and look at how much energy pumping uses per tonne-kilometre. Compare it with 'Tankers, barges and fuel trucks' for the same distance.
  • Go to 'Fuel stocks and strategic reserves' and find how many days of imports India's strategic reserve covers. Relate it to the 400 million barrel IEA stock release of March 2026.

Final quiz

What is the main biological origin of crude oil?

Oil comes mostly from marine microorganisms buried in oxygen-poor mud.

Roughly what fraction of the carbon in buried biomass ends up in marketed oil, on Smil's estimate?

About one unit in 10,000 on average.

Which two techniques together created the shale revolution?

Their combination made tight shale productive from about 2007.

What happened to the global oil R/P ratio while annual extraction rose about twelvefold after the 1940s?

Reserve additions outpaced consumption, which is why R/P is not a countdown.

What did the IEA's Oil 2025 report expect before the 2026 war?

It foresaw a well-supplied market and a possible glut, not shortage.

How did the IEA describe the 2026 Hormuz disruption?

With Gulf output down by more than 10 mb/d, it exceeded every earlier disruption.

Why does liquefaction make gas tradable across oceans?

The liquid fits in tankers; the cost is energy and capital in the chain.

According to the Energy Institute, what happened to world coal use in 2024?

Growth in Asia, especially China, outweighed declines in Europe and North America.
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Sources for this module