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Oil 101
OIL 101 is a straightforward guide to oil and an essential read for anyone coming to grips with where oil prices, the economy and society are headed. In OIL 101, Downey provides the facts one needs to understand oil, from its history and chemistry, to refining, finished products, storage, transportation, alternatives, and how prices are determined every day in global wholesale oil markets and how those markets are connected to prices at the pump.
452 pages, Hardcover
First published January 1, 2009
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Displaying 1 - 30 of 68 reviews
October 31, 2019
This is the kind of book read by people in the oil industry to get an overall view of the exploration, extraction, refining, and marketing of petroleum and petroleum products (including retail gasoline), and by financial analysts to find out how the pieces of such a complex industry fits together.
This means that for laymen like you and me it isn't exactly an easy-breezy read, but author Morgan Patrick Downey, in my opinion, does an amazingly good job. For example, he discusses Saudi Arabian estimates of their oil supplies (they constantly overstate, her avers) and how different companies' gasoline gets pushed through the same common pipeline without damage to the product. (Different octanes tend to stay separate in the pipeline, one after the other, and as for tinting and the inevitable "BR-549" ingredients retail gas companies flog to distinguish their product from their competitors', those are added after the gasoline comes out of the pipeline at destination, pre-retail sale.)
I recommend this book. It will take some work, but you'll come away very well informed. The fact that OIL 101 is now ten years old may make it slightly less efficacious than it was when it was first published in 2009.
This means that for laymen like you and me it isn't exactly an easy-breezy read, but author Morgan Patrick Downey, in my opinion, does an amazingly good job. For example, he discusses Saudi Arabian estimates of their oil supplies (they constantly overstate, her avers) and how different companies' gasoline gets pushed through the same common pipeline without damage to the product. (Different octanes tend to stay separate in the pipeline, one after the other, and as for tinting and the inevitable "BR-549" ingredients retail gas companies flog to distinguish their product from their competitors', those are added after the gasoline comes out of the pipeline at destination, pre-retail sale.)
I recommend this book. It will take some work, but you'll come away very well informed. The fact that OIL 101 is now ten years old may make it slightly less efficacious than it was when it was first published in 2009.
October 17, 2010
Very useful comprehensive overview of oil and the oil industry written in a straight-forward no-nonsense style. The list of its chapters will give you a good feel for it (followed by my rating for each, 1-5 with 1 being weak, 3 adequate, and 5 excellent):
o A brief history of oil - 3
o A crude oil assay - 5
o Components of oil liquids - 4
o Chemistry of oil - 2 (since when has C been able to have 5 bonds... and H, 2?)
o Industry overview - 4
o Exploration and production - 5
o Refining - 5
o Standards - 3
o Finished products - 5
o Petrochemicals - 2 (not something he's really interested in it seems)
o Transporting oil - 5
o Storage - 5
o Seasonality - 4
o Reserves - 3 (see comments below).
o Environmental regulations - 4
o New engine technologies - 1 (superficial but unimportant in this context)
o Oil prices - 3 (see comments below)
o Forward oil markets -- futures and swaps - 4
o Forward oil markets -- options - 4
o Managing oil price risk -- 4
The average of the above is probably over 4, but I'm only giving the book three stars because it's a subjective rating and while I found the book very interesting, oil isn't really a subject I'm wild about. It is, however, an extremely important subject, given the central role that oil plays in our world and the grave repercussions should global oil production peak and subsequently decline in the near future. So, I decided I should probably try to learn more, found this book, and am glad I did -- it is as good an overview as I could have hoped for.
But it does have one unavoidable failing, and three irritating weaknesses for anyone interested in assessing the likelihood and timing of peak oil. The unavoidable failing is that it was written in early/mid 2008 and as such is already a little dated: for example, it gives no insight into the 08 price spike or its role in triggering the Great Recession.
The irritating weaknesses are that it contains no projections as to future production or demand curves, no assessments of the true size of OPEC reserves, and no speculation or analysis of the interplay between oil prices, the global economy, and oil exploration and development. Why not? Probably because, as the title implies, Downey intended to write a sort of introductory textbook whose contents would be largely valid whatever happens, rather than a speculative work that could be rapidly overtaken by events. And that's OK... one can find the speculation and projections elsewhere; but it would still have been nice to hear what he thinks is going to happen.
That being said, however, this is a book you should read if you want to understand the arguments around peak oil, and therefore to be able to judge it's likelihood, timing, and consequences. And unless you have no assets and no control over your life, or are totally fatalistic or terminally ill, then peak oil is a topic that you really should engage with.
o A brief history of oil - 3
o A crude oil assay - 5
o Components of oil liquids - 4
o Chemistry of oil - 2 (since when has C been able to have 5 bonds... and H, 2?)
o Industry overview - 4
o Exploration and production - 5
o Refining - 5
o Standards - 3
o Finished products - 5
o Petrochemicals - 2 (not something he's really interested in it seems)
o Transporting oil - 5
o Storage - 5
o Seasonality - 4
o Reserves - 3 (see comments below).
o Environmental regulations - 4
o New engine technologies - 1 (superficial but unimportant in this context)
o Oil prices - 3 (see comments below)
o Forward oil markets -- futures and swaps - 4
o Forward oil markets -- options - 4
o Managing oil price risk -- 4
The average of the above is probably over 4, but I'm only giving the book three stars because it's a subjective rating and while I found the book very interesting, oil isn't really a subject I'm wild about. It is, however, an extremely important subject, given the central role that oil plays in our world and the grave repercussions should global oil production peak and subsequently decline in the near future. So, I decided I should probably try to learn more, found this book, and am glad I did -- it is as good an overview as I could have hoped for.
But it does have one unavoidable failing, and three irritating weaknesses for anyone interested in assessing the likelihood and timing of peak oil. The unavoidable failing is that it was written in early/mid 2008 and as such is already a little dated: for example, it gives no insight into the 08 price spike or its role in triggering the Great Recession.
The irritating weaknesses are that it contains no projections as to future production or demand curves, no assessments of the true size of OPEC reserves, and no speculation or analysis of the interplay between oil prices, the global economy, and oil exploration and development. Why not? Probably because, as the title implies, Downey intended to write a sort of introductory textbook whose contents would be largely valid whatever happens, rather than a speculative work that could be rapidly overtaken by events. And that's OK... one can find the speculation and projections elsewhere; but it would still have been nice to hear what he thinks is going to happen.
That being said, however, this is a book you should read if you want to understand the arguments around peak oil, and therefore to be able to judge it's likelihood, timing, and consequences. And unless you have no assets and no control over your life, or are totally fatalistic or terminally ill, then peak oil is a topic that you really should engage with.
October 13, 2014
This is somewhere between a textbook and an encyclopedia entry. If that does not sound appealing to you, don't read this, because its quality in that respect is really 100% of what it has going for it. If it does, you'll find this to be a great overview about an industry that has a very large influence on our day to day lives. I was referred to this book by a Quora user (Ryan Carlyle) who works in the oil industry and often has many interesting insights to share about it.
Start-to-finish, methodical descriptions of each stage of production: exploration, drilling, refining, transportation, and trading on the global markets. Covers actual companies (ExxonMobil, etc.) and the history of the oil industry only very lightly - go read The Prize for more on the latter. Overall chock full of insights, and readable even for a layman like myself, although the author sometimes presents seemingly unimportant details in very dry fashion. I know it's intended as a reference, but it doesn't excuse bland writing. Industry and process details are better written than chemistry details (the author is a commodities trader, and while that doesn't necessarily mean he doesn't have a background in the sciences, it does make that more likely). Also sometimes uses terms before defining them clearly (i.e. octane rating), and I think in general it would have benefited from some more editorial working-over. Nevertheless great for people like me who like reading Wikipedia, and liked reading traditional encyclopedia articles in times gone by.
Start-to-finish, methodical descriptions of each stage of production: exploration, drilling, refining, transportation, and trading on the global markets. Covers actual companies (ExxonMobil, etc.) and the history of the oil industry only very lightly - go read The Prize for more on the latter. Overall chock full of insights, and readable even for a layman like myself, although the author sometimes presents seemingly unimportant details in very dry fashion. I know it's intended as a reference, but it doesn't excuse bland writing. Industry and process details are better written than chemistry details (the author is a commodities trader, and while that doesn't necessarily mean he doesn't have a background in the sciences, it does make that more likely). Also sometimes uses terms before defining them clearly (i.e. octane rating), and I think in general it would have benefited from some more editorial working-over. Nevertheless great for people like me who like reading Wikipedia, and liked reading traditional encyclopedia articles in times gone by.
November 24, 2015
A comprehensive, albeit brief overview of the oil & gas industry. It deals with a wide range of topics and covers the full life cycle of various hydrocarbons. These include but are not limited to: exploration, drilling & completion, production, reserves reporting, transportation, refining, finished products, petrochemicals, environmental regulation, and oil market futures/swaps/options trading. It's very obvious where the author's expertise lies, as the sections on oil markets and finished products are relatively detailed whereas the sections on exploration and production are severely lacking.
May 31, 2020
Being a petroleum engineer myself, this was a light read. It contains all the background information to the history of oil and the oil industry.
December 17, 2017
A long list of jumbled information with very poor explanatory power. It quickly becomes apparent that the author has no understanding of chemistry or chemical engineering. Also highly repetitive. Not recommended unless you merely want to namedrop terminology.
September 11, 2021
Very detailed and exactly what it sounds like. Great intro to the oil industry (at least I how so). But it is out of date and can be slow because it’s also kinda a reference book.
August 8, 2025
well, seems like oil can't be "just stopped"
September 12, 2015
This is a great book for someone new to the oil industry looking for an into to each piece of the industry from the chemistry of oil on through derivatives trading. Overall I felt he did a good job of explaining each piece without being too technical, while giving you the terms you need to know to understand the business.
However, it was not edited very well, there were lots of little errors that distracted me from the content. For example, in the chemistry section there was a diagram of a oil molecule and the carbon atom had 5 bonds (which is impossible-I'm new to the oil industry, but have a physics degree).
Finally, as he is an oil trader, I expected the section on markets and trading to be especially strong and was somewhat disappointed. I felt like his explanations in that section were not clear enough, and the examples given not sufficiently detailed to really help me understand the trades. Given how well he did at finding a balance between technical/non-technical in the rest of the book, I think his expertise in this area limited his ability to know that he wasn't being clear (though some say that true expertise means you can explain it to your grandma...).
However, it was not edited very well, there were lots of little errors that distracted me from the content. For example, in the chemistry section there was a diagram of a oil molecule and the carbon atom had 5 bonds (which is impossible-I'm new to the oil industry, but have a physics degree).
Finally, as he is an oil trader, I expected the section on markets and trading to be especially strong and was somewhat disappointed. I felt like his explanations in that section were not clear enough, and the examples given not sufficiently detailed to really help me understand the trades. Given how well he did at finding a balance between technical/non-technical in the rest of the book, I think his expertise in this area limited his ability to know that he wasn't being clear (though some say that true expertise means you can explain it to your grandma...).
October 10, 2012
This book, along with Oil: A Beginner’s Guide by Vaclav Smil, are great reads for the uneducated & educated. It’s not too technical, & covers all aspects of the up-stream, mid-stream, & down-stream portions of the industry (geological, exploration, geophysical, chemical structure of oil, engineering, various extraction methods, production, refining, retail, trading oil futures, environmental impacts, pricing methods, etc.); along with the worldwide history of it, & worldwide politics of it. It gives a straightforward & objective analysis of the entire industry. While it doesn’t go into thorough detail on any one topic, it definitely gives enough detail on every topic; to ensure that one can easily use it as a valuable reference book. I just finished up reading it for a second time & found it just as enlightening as I did the first time I read it. While it is very informative, it's also a bit boring (it read's much like a college textbook would read.
March 13, 2017
If you are a technical engineer or technician you will find mistakes in sections that talk about your particular field of expertise (drilling, completions, production, etc.). If this is you, simply skip that chapter. If you are a layman, it's a good starting point to understand how most things work.
This book is not a good source for technical understanding on how to construct a well. It is however, an excellent book that provides lots of information about how oil moves around the world and how money is made.
This book is not a good source for technical understanding on how to construct a well. It is however, an excellent book that provides lots of information about how oil moves around the world and how money is made.
August 26, 2018
A cursory overview of all things oil. Started with a history of oil, then a few chapters on chemistry, a few on the sources and uses and life cycle of oil products, some commentary on geological methods of estimating oil reserves, an overview of US regulations, new engine technology, and finally a very brief glance at the financial markets as they relate to oil.
February 27, 2013
Excellent intro book. Hope Mr. Downey chooses to update it now thtat the shale plays have become big.
August 21, 2018
If you seek a well-crafted technical guide to the production of oil and gas suited for the non- engineer this is a hot contender. The author used to be the Global Head of Commodities at Bloomberg after being a commodities trader at Standard Chartered, Bank of America and Citibank. There is no foreword to discuss the purpose of the book, but instead the reader gets to dive right into the first 1859 findings of oil in Oil Creek, Titusville, Pennsylvania. The sleeve however revels that the aim is to meet “the need for a clear, concise guide to oil”.
Downey has divided the chapters into two parts. The first called Oil Fundamentals constitutes almost 9/10th of the text and stretches over 16 chapters and covers the products and the processes of the oil and gas industry. Part two, Oil Markets, is much shorter and the author’s background as a commodities trader is evident in the way that it mostly discuss the oil derivatives markets. In reality the first part could have been split into three as chapters 1 through 5 discuss the oil industry and oil as a chemical substance, chapters 6 through 12 report on and follow the production chain of oil starting with exploration and ending with storage and finally chapters 13 to 16 tie up a lot of loose ends discussing miscellaneous topics not covered elsewhere. Again, these last few chapters point to Downey’s background as they for example address product specifications, seasonality of supply/demand etc.
One of the strong points of Oil 101 is the breadth. The text is dense and packed with details and facts on topics that for an equity investor not only would sort under the Energy industry but also under Utilities, Shipping, Chemistry and Automotives. Downey is passionate about giving the full picture of “how oil works” and the text is spiced up with quaint industry terms like the electrical devices cleaning oil pipes called ‘pigs’ etc. I also think that Downey does a good job in structuring a number of entangled topics into logical sections and paints an illustrative picture of the functioning’s of the topic. Explaining the “chemical box” of refining to the non-technical user in an easily understood way is no small feat but the author pulls it off.
One type of aspects of the oil industry is perhaps less described – the business aspects. The management of an oil company is more than the practical aspects of exploring, drilling, transporting etc. Andrew Inkpen’s and Michael Moffett’s The Global Oil & Gas Industry: Management, Strategy & Finance does a better job covering these angles. Geopolitical issues are also somewhat absent from the discussion. However, for a non-engineer entering the oil and gas sector this book gives an excellent and comprehensive view of the topics not picked up in business school.
One small complaint is that the book isn’t very “pretty”. Sure, the cover is of sleek design but the text itself is small and dense, the pictures are also relatively small and in black and white. It’s also evident how hard it is to make predictions and how predictions are characterized by their times. The book is written in 2009, a time when common knowledge was that energy prices could only go up. A few years later shale gas and Elon Musk have entered the picture and Goldman Sachs is discussing if the oil price will go down to 20$ a barrel. However, this is more a reflection on the difficulty of predictions in general and should not cast any specific shadow on Downey.
The nuts and bolts of the oil industry are truly well covered in this “clear, concise guide to oil”.
Downey has divided the chapters into two parts. The first called Oil Fundamentals constitutes almost 9/10th of the text and stretches over 16 chapters and covers the products and the processes of the oil and gas industry. Part two, Oil Markets, is much shorter and the author’s background as a commodities trader is evident in the way that it mostly discuss the oil derivatives markets. In reality the first part could have been split into three as chapters 1 through 5 discuss the oil industry and oil as a chemical substance, chapters 6 through 12 report on and follow the production chain of oil starting with exploration and ending with storage and finally chapters 13 to 16 tie up a lot of loose ends discussing miscellaneous topics not covered elsewhere. Again, these last few chapters point to Downey’s background as they for example address product specifications, seasonality of supply/demand etc.
One of the strong points of Oil 101 is the breadth. The text is dense and packed with details and facts on topics that for an equity investor not only would sort under the Energy industry but also under Utilities, Shipping, Chemistry and Automotives. Downey is passionate about giving the full picture of “how oil works” and the text is spiced up with quaint industry terms like the electrical devices cleaning oil pipes called ‘pigs’ etc. I also think that Downey does a good job in structuring a number of entangled topics into logical sections and paints an illustrative picture of the functioning’s of the topic. Explaining the “chemical box” of refining to the non-technical user in an easily understood way is no small feat but the author pulls it off.
One type of aspects of the oil industry is perhaps less described – the business aspects. The management of an oil company is more than the practical aspects of exploring, drilling, transporting etc. Andrew Inkpen’s and Michael Moffett’s The Global Oil & Gas Industry: Management, Strategy & Finance does a better job covering these angles. Geopolitical issues are also somewhat absent from the discussion. However, for a non-engineer entering the oil and gas sector this book gives an excellent and comprehensive view of the topics not picked up in business school.
One small complaint is that the book isn’t very “pretty”. Sure, the cover is of sleek design but the text itself is small and dense, the pictures are also relatively small and in black and white. It’s also evident how hard it is to make predictions and how predictions are characterized by their times. The book is written in 2009, a time when common knowledge was that energy prices could only go up. A few years later shale gas and Elon Musk have entered the picture and Goldman Sachs is discussing if the oil price will go down to 20$ a barrel. However, this is more a reflection on the difficulty of predictions in general and should not cast any specific shadow on Downey.
The nuts and bolts of the oil industry are truly well covered in this “clear, concise guide to oil”.
April 2, 2020
I find it so ironic that I became interested in oil right about now, with all this Saudi-Russia oil war going on. I truly had a “laughing out loud” moment when reading this paragraph:
“The price of crude increased almost fourfold between October 16, 1973, and Jan 1, 1974, from $14 to over $50 in today’s terms. The embargo continued for six months until March 1974, when Arab oil producers, except Libya, announced its end. This was the first and only time to date the Arab oil weapon has been used. Arab nations appeared somewhat shocked themselves that they could now have such a large effect on oil prices.”
Leaving the funny coincidences and global politics aside, this book is an absolute beast when it comes to explaining the ins and outs of the oil industry. It covers everything, from the chemistry of the oil to oil markets, going incrementally through fascinating topics like exploration, production, refining process, transportation and storage. It’s just so comprehensive! And it’s very technical: if you are not interested in this aspect, this is not the book for you. Also, prepare to be flooded with abbreviations (apparently the oil industry is filled with them)!
Caution: this is not a history book! Significant events that occurred in the past are briefly touched but are not the main focus, so don’t start reading it with this expectation, or you’ll be disappointed.
For anybody that’s passionate about macroeconomics and the oil industry and market, this is a must-read!
“The price of crude increased almost fourfold between October 16, 1973, and Jan 1, 1974, from $14 to over $50 in today’s terms. The embargo continued for six months until March 1974, when Arab oil producers, except Libya, announced its end. This was the first and only time to date the Arab oil weapon has been used. Arab nations appeared somewhat shocked themselves that they could now have such a large effect on oil prices.”
Leaving the funny coincidences and global politics aside, this book is an absolute beast when it comes to explaining the ins and outs of the oil industry. It covers everything, from the chemistry of the oil to oil markets, going incrementally through fascinating topics like exploration, production, refining process, transportation and storage. It’s just so comprehensive! And it’s very technical: if you are not interested in this aspect, this is not the book for you. Also, prepare to be flooded with abbreviations (apparently the oil industry is filled with them)!
Caution: this is not a history book! Significant events that occurred in the past are briefly touched but are not the main focus, so don’t start reading it with this expectation, or you’ll be disappointed.
For anybody that’s passionate about macroeconomics and the oil industry and market, this is a must-read!
June 5, 2019
This book is not for someone looking for an easy read on oil geopolitics. Oil 101 is written specifically for people who want to gain an in-depth knowledge of oil markets. Hence, if you are looking to be a commodities trader, analyst or writer, this book is a treasure trove of knowledge. Starting from how oil reserves are identified, the book takes you deep into every aspect of oil, right down to its journey from the drill shaft, through refineries, storages and finally to a car's or ship's fuel tank. For the traders, it also delves into futures, swaps and OTC derivate markets. While at times it can get a bit bland, specially while describing various processes of refineries as well as grades and blends of oil products, the text in the book will greatly help the reader connect the dots in oil markets.
I researched a bit about the best books available on oil markets and I can confidently say that this is the best book out there. I hope the author releases a new editon of this book as markets have changed a lot in the last decade and the US shale revolution has totally changed the oil market economics. But still the information in the book is valid and worthy of reading.
I researched a bit about the best books available on oil markets and I can confidently say that this is the best book out there. I hope the author releases a new editon of this book as markets have changed a lot in the last decade and the US shale revolution has totally changed the oil market economics. But still the information in the book is valid and worthy of reading.
May 21, 2023
This is one excellent book. The author has succeeded in writing a comprehensive text with broad coverage of the field yet accurate at all stages and written in a simple, direct no-nonsense style.
If you are an outsider, looking in with keen interest, this is the perfect book for you.
Only regret is the text is starting to date a bit. Some of the language around battery technology, electric vehicles, hybrid engines for example would do with a little adjustment. A lot has happened there since 2009.
An updated version of the book is probably due.
If you are an outsider, looking in with keen interest, this is the perfect book for you.
Only regret is the text is starting to date a bit. Some of the language around battery technology, electric vehicles, hybrid engines for example would do with a little adjustment. A lot has happened there since 2009.
An updated version of the book is probably due.
August 3, 2025
Holistically, this book gives a great and very detailed background of the oil. The chapters heavily focused on organic chemistry and their structures were difficult for someone with a light science background, however, still interesting. For someone that’s not a petroleum engineer or oil trader, it was a bit challenging to fully grasp the concepts…Still an interesting book which piqued my interest in the oil markets
July 15, 2018
A must-read for anyone involved in the oil market.
The book covers almost all the important topics in the business including the chemistry behind oil, production of oil, refining and the finished products, transportation, storage, and trading.
Only downside is the book can be a bit out-dated as the belief that shale oil is uneconomical to extract is a recurring fact throughout the book.
The book covers almost all the important topics in the business including the chemistry behind oil, production of oil, refining and the finished products, transportation, storage, and trading.
Only downside is the book can be a bit out-dated as the belief that shale oil is uneconomical to extract is a recurring fact throughout the book.
December 9, 2017
Comprehensive and yet still compelling. Some concepts could use a bit more fleshing out (specifically the sections on oil markets), but for a single book it does a fabulous job explaining in layman's terms the history, chemistry, production, transportation and end uses of oil.
June 15, 2022
A very comprehensive and interesting introduction to all aspects of oil, from prospecting, drilling, extraction, refining, transporting, distribution, retail to how it is traded on the world's financial markets. Recommended to anybody that wants to find out a bit more about the black stuff.
September 24, 2025
I did not read this book front to back, some chapters were very technical, but I would like to go back to them in time. Everything I read, was clear and gave me a foundational understanding of the industry.
January 16, 2018
A good overview of upstream and refresher on downstream for this petrochemical guy. Of course some predictions / opinions in a book published in 2009 didn’t pan out...shale oil and gas anyone?
August 12, 2018
My go to book when working in oil industry
December 11, 2019
A primer for Oil trading
March 19, 2020
great read, a few errors for instance rig responsibilities - tool pusher/TP doesnt work in operator/company but drilling contractor
August 18, 2020
I will definitely be using this more as a reference guide than a novel. Honestly, very thorough though.
February 6, 2021
The most of book was focused on fundaments and more general about oil trading. Just last 20% of book was focused on trading oil itself. I give 4* as nice introduction book.
March 2, 2021
A bit dated but still a broad overview of the industry.
October 11, 2022
I learned a lot about oil from this book
Displaying 1 - 30 of 68 reviews