Exploration & Extraction:
The first step in sourcing petroleum
products
involves exploration and extraction
from oil fields around the world.
Oil
companies conduct seismic surveys
and drilling operations to locate
crude oil
deposits. These can be located
offshore, in deep-water reserves, or
onshore.
Once reserves are identified,
drilling rigs are used to extract
crude oil from
beneath the earth’s surface.
Refining:
Crude oil is
transported to refineries, where it
undergoes
refining processes such as
distillation, cracking, and
blending. These processes
break down crude oil into various
petroleum products such as gasoline,
diesel,
jet fuel, kerosene, and
petrochemical feedstocks.
Supplier Networks:
Petroleum
suppliers may be state-owned oil
companies,
large multinational corporations, or
independent producers, depending on
the
region and the nature of the crude
oil extraction. Sourcing strategies
vary from
long-term contracts to spot market
purchases.
Transportation
Infrastructure:
Petroleum
products are transported via
pipelines, tanker trucks, railcars,
and especially large tanker ships.
In global
trade, marine transportation is the
most common method for shipping
crude oil
and refined petroleum products.
Tanker ships can carry millions of
barrels of
crude oil across long distances,
from oil-producing countries to
refineries and
markets around the world.
Pipeline Transportation:
For
land-based transport, pipelines are
commonly used to carry crude oil and
refined products from extraction
sites to
refineries, storage facilities, and
distribution hubs. Pipelines offer a
cost-effective and reliable means of
transporting large quantities over
long
distances.
Logistics
Management:
Efficient
logistics systems ensure that
petroleum
products are moved from extraction
points to refineries, and from
refineries to
international shipping routes, using
real-time tracking and monitoring
systems.
Refinery Storage:
Refined
petroleum products are stored in
large tanks
within refineries, where products
are kept at regulated temperatures
and
pressures to maintain quality. Some
refineries also operate floating
storage
units in ports, enabling a flexible
supply system.
Terminal and Tanker
Storage:
Once the petroleum
products are refined,
they are often stored in large
terminal tanks located near major
ports and
distribution hubs. These tanks can
store millions of barrels of various
products. Some facilities are
equipped with blending tanks to mix
different
grades of products to meet market
demand.
Strategic
Reserves:
Governments and
large corporations often maintain
strategic petroleum reserves (SPR)
to ensure a buffer supply during
disruptions.
These reserves are stored in
underground caverns, tanks, or other
secure
locations.
Distribution Channels:
Petroleum products are delivered
from storage
facilities to end-users via
pipelines, railways, tanker trucks,
or smaller
vessels. For example, refined
products like gasoline and diesel
are delivered to
retail gas stations through tanker
trucks.
Global Markets:
Crude oil
and refined petroleum products are
distributed
globally, with countries and
companies engaging in the
import/export of energy.
The end products may reach consumers
directly (e.g., gas stations for
fuel) or
industrial sectors (e.g., power
plants, airlines, etc.).
Consumer Delivery:
End
users, including consumers and
industries,
receive petroleum products via
retail outlets, airports, ports, and
industrial
supply systems, based on the market
demand and contract terms.