# Oil, gas and coal: how they form, are found, moved and priced: Key terms, quiz and sources Source page: https://www.materialinsights.org/learn/energy/oil-gas-coal/review/ [Understanding Energy](https://www.materialinsights.org/learn/energy/) / [Module 6: Oil, gas and coal: how they form, are found, moved and priced](https://www.materialinsights.org/learn/energy/oil-gas-coal/) 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](https://www.materialinsights.org/energy/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](https://www.materialinsights.org/energy/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](https://www.materialinsights.org/energy/thermal_coal/)' and '[Coking coal](https://www.materialinsights.org/energy/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. [Next module: Making electricity: thermal, nuclear, hydro, wind and solar →](https://www.materialinsights.org/learn/energy/making-electricity/) ### Sources for this module - Smil, Oil: A Beginner's Guide (2008) · via Smil Mastery Course, M6 'What oil is and how it formed', 'Finding and producing oil', 'Moving and refining oil', 'How long will oil last?', 'Oil's benefits, burdens and prices' - Smil, Natural Gas: Fuel for the 21st Century (2015) · via Smil Mastery Course, M6 'What oil is and how it formed', 'Finding and producing oil', 'Natural gas: the cleanest fossil fuel', 'Shale gas, coal and the fossil future' - Smil, Energy in Nature and Society: General Energetics of Complex Systems (2008) · via Smil Mastery Course, M6 'What oil is and how it formed' - Smil, Two Prime Movers of Globalization: The History and Impact of Diesel Engines and Gas Turbines (2010) · via Smil Mastery Course, M6 'Finding and producing oil', 'Moving and refining oil', 'Natural gas: the cleanest fossil fuel' - Smil, Energy at the Crossroads: Global Perspectives and Uncertainties (2003) · via Smil Mastery Course, M6 'How long will oil last?', 'Oil's benefits, burdens and prices', 'Natural gas: the cleanest fossil fuel' - Smil, Energy Myths and Realities: Bringing Science to the Energy Policy Debate (2010) · via Smil Mastery Course, M6 'How long will oil last?', 'Oil's benefits, burdens and prices' - Smil, Energy Transitions: History, Requirements, Prospects (2010; 2nd ed. 2017) · via Smil Mastery Course, M6 'How long will oil last?', 'Shale gas, coal and the fossil future' - Smil, Global Catastrophes and Trends: The Next Fifty Years (2008) · via Smil Mastery Course, M6 'Oil's benefits, burdens and prices' - Smil, Power Density: A Key to Understanding Energy Sources and Uses (2015) · via Smil Mastery Course, M6 'Natural gas: the cleanest fossil fuel', 'Shale gas, coal and the fossil future' - Smil, How the World Really Works (2022) · via Smil Mastery Course, M6 'Shale gas, coal and the fossil future' - [IEA (2025). Oil 2025: Analysis and forecast to 2030. Paris: International Energy Agency, 17 June 2025.](https://www.iea.org/news/amid-rising-geopolitical-strains-oil-markets-face-new-uncertainties-as-the-drivers-of-supply-and-demand-growth-shift (demand plateau about 105.5 mb/d; capacity 114.7 mb/d; China peak 2027; petrochemicals one in six barrels; EVs 5.4 mb/d; US 90% of supply growth)) · web - [IEA (2026). Gas Market Report, Q3-2026. Paris: International Energy Agency, July 2026.](https://www.iea.org/reports/gas-market-report-q3-2026/executive-summary (Qatar and UAE LNG -45% or 54 bcm in 2026; JKM Q2 about $17.5/MBtu; fertiliser cuts in India, Bangladesh, Pakistan; new projects close to 50 bcm in 2026; 140 bcm cumulative loss 2026-2030; gas demand -0.5%)) · web - [IEA (2026). The Strait of Hormuz and global LNG supply, commentary, March 2026, republished by Hydrocarbon Engineering, 16 March 2026.](https://www.hydrocarbonengineering.com/special-reports/16032026/iea-the-strait-of-hormuz-and-global-lng-supply (about 110 bcm, almost a fifth of world LNG, via Hormuz in 2025; Ras Laffan shut after 2 March attack)) · web - [IPCC (2006). 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Vol. 2 Energy, default CO2 emission factors.](https://www.ipcc-nggip.iges.or.jp/public/2006gl/vol2.html (typical factors used in the comparison table)) · web - [IEA (2026). Oil Market Report, March 2026. Paris: International Energy Agency.](https://www.iea.org/reports/oil-market-report-march-2026 (largest supply disruption in the history of the oil market; war began 28 February; Hormuz flows from about 20 mb/d to a trickle; March supply down about 8 mb/d; 400 mb release agreed 11 March)) · web - [IEA (2026). Oil Market Report, May 2026. Paris: International Energy Agency.](https://www.iea.org/reports/oil-market-report-may-2026 (Gulf output 14.4 mb/d below pre-war in April; cumulative Gulf losses over 1 billion barrels; North Sea Dated April average $120.36, peak $144; jet fuel nearly tripled; record middle distillate cracks)) · web - [IEA (2026). Oil Market Report, August 2026. Paris: International Energy Agency.](https://www.iea.org/reports/oil-market-report-August-2026 (strait effectively closed again from early July; Gulf output 8.3 mb/d below pre-war in July)) · web - [IEA (2026). Oil Market Report, September 2026, as reported by Oil & Gas Journal (11 September 2026) and Argus (11 September 2026).](https://www.ogj.com/general-interest/economics-markets/news/55404447/iea-sees-oil-demand-decline-deepening-as-middle-east-disruptions-persist; https://www.argusmedia.com/en/news-and-insights/latest-market-news/2876612-hormuz-oil-export-losses-near-2.8bn-bl-iea (Hormuz flows 7.6 mb/d in August; Gulf supply 10.1 mb/d below pre-war; stock draws 507 mb since February; 2026 demand -2.5 mb/d)) · web - [IEA (2026). Oil Market Report, October 2026 (published 14 October 2026), as reported by OilMonster (15 October 2026) and All India Radio News (14 October 2026).](https://www.oilmonster.com/article/iea-cuts-oil-demand-again-as-2026-use-falls-26m-bpd/8695; https://newsonair.gov.in/iea-says-repeated-attacks-in-gulf-make-oil-supply-recovery-fragile/ (2026 demand -2.6 mb/d, 2027 +2 mb/d; September supply +2.5 mb/d to 102.3 mb/d led by Saudi Arabia and the UAE; stocks about 509 mb below end-February; about 331 mb of 426 mb emergency stocks released; record freight costs; recovery fragile). The IEA report page itself, https://www.iea.org/reports/oil-market-report-october-2026, could not be retrieved.) · web - [Al Jazeera (2026). Saudi Arabia says East-West pipeline pumping 5.8 million bpd, 6 October 2026.](https://www.aljazeera.com/economy/2026/10/6/saudi-arabia-says-east-west-pipeline-pumping-5-8-million-bpd (back to 5.8 mb/d on 6 October after drone strikes in early September; maximum capacity 7 mb/d; Kpler put August flows near 2 mb/d)) · web - [S&P Global Commodity Insights (2026). VLCC transits climb at Hormuz, steady at Bab al-Mandab for second day, 26 October 2026.](https://www.spglobal.com/energy/en/news-research/latest-news/crude-oil/102626-vlcc-transits-climb-at-hormuz-steady-at-bab-al-mandab-for-second-day (17 ship transits a day on 24-25 October, 6 VLCCs on 25 October; US says more than 3,000 ships transited with CENTCOM support in six months; IMO counted 29 attacks on merchant ships 1-22 October)) · web - [Clarksons Research weekly recap of 9 October 2026, as reported by Cyprus Shipping News, 14 October 2026; Poten & Partners data as reported by Gulf News, 5 October 2026.](https://cyprusshippingnews.com/2026/10/14/global-vlcc-spot-earnings-rise-to-805000-day/; https://gulfnews.com/business/energy/tanker-costs-soar-43-fold-as-hormuz-tensions-reshape-global-oil-trade-1.500698296 (average VLCC spot earnings about $805,000 a day, an all-time high; about 10 mb/d of crude crossing Hormuz, about 80% shuttled by ship-to-ship transfer in the Gulf of Oman; Poten Gulf-Far East assessment about $1.3 million a day against about $30,000 in early January)) · web - [US EIA (2025). Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint. Today in Energy, 16 June 2025.](https://www.eia.gov/todayinenergy/detail.php?id=65504 (about 20 mb/d in 2024, about 20% of world petroleum liquids consumption; about a fifth of LNG trade; about 2.6 mb/d of unused Saudi and UAE bypass capacity)) · web - Energy Institute (2025). Statistical Review of World Energy 2025, 74th edition (2024 data). London: Energy Institute. [web ↗](https://www.energyinst.org/statistical-review) · web - [IPCC (2006). 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Vol. 2 Energy, Ch. 1, Tables 1.2 and 1.4.](https://www.ipcc-nggip.iges.or.jp/public/2006gl/pdf/2_Volume2/V2_1_Ch1_Introduction.pdf (default net calorific values and CO2 emission factors)) · web - [Ministry of Coal, Government of India (2019). Ash content in the coal, Lok Sabha unstarred question 677, 26 June 2019.](https://coal.nic.in/sites/default/files/2022-09/1579836062_Ash_Content_in_the_Coal_26-6-2019_CCNT.pdf (Indian coal 15-45% ash, most 35-45%; imported coal about 10-20%; attributed to drift origin)) · web - [Reliance Industries. Refining & Marketing (company web page).](https://www.ril.com/ourbusinesses/petroleumrefiningandmarketing.aspx (Jamnagar: 1.4 mb/d, Nelson complexity 21.1, more than 216 crude grades processed)) · web - [PTI, India to switch to world's cleanest petrol, diesel from 1 April, as published by The Quint, 19 February 2020.](https://www.thequint.com/news/india/india-to-switch-to-worlds-cleanest-petrol-diesel-from-1-april (BS-IV 50 ppm, BS-VI 10 ppm sulfur; BS-V skipped; about Rs 35,000 crore of refinery upgrades)) · web - [Ministry of Coal, Government of India (2025). PIB release, 1 April 2025.](https://www.coal.nic.in/sites/default/files/2025-04/PIB2117280.pdf (FY2024-25 coal production 1,047.57 Mt provisional, up 4.99%)) · web ## Other sections - [Module overview](https://www.materialinsights.org/learn/energy/oil-gas-coal/index.md) - [How fossil fuels form](https://www.materialinsights.org/learn/energy/oil-gas-coal/p1/index.md) - [Finding and producing oil and gas](https://www.materialinsights.org/learn/energy/oil-gas-coal/p2/index.md) - [Moving and refining oil](https://www.materialinsights.org/learn/energy/oil-gas-coal/p3/index.md) - [How long will oil last, and why does its price swing?](https://www.materialinsights.org/learn/energy/oil-gas-coal/p4/index.md) - [Natural gas, LNG, shale and coal's future](https://www.materialinsights.org/learn/energy/oil-gas-coal/p5/index.md)