Oil Transport - Industry


Getting oil to market is a process that requires various transportation and storage technologies, usually referred to as “midstream”. Oil is often produced in remote locations away from where it will be consumed; therefore, transportation networks have been built to transport the crude oil to refineries where it is processed and to ship the refined products to where they will be consumed—like a gas station. Storage facilities are used to balance supply and demand of oil and refined products.

Oil is normally transported by one of four options:

  • Pipeline – the most commonly used form of oil transportation is through oil pipelines. Pipelines are typically used to move crude oil from the wellhead to gathering and processing facilities and from there to refineries and tanker loading facilities. Pipelines require significantly less energy to operate than trucks or rail and have a lower carbon footprint.

  • Rail – Oil shipment by train has become a growing phenomenon as new Oil reserves are identified across the globe. The relatively small capital costs and construction period make rail transport an ideal alternative to pipelines for long-distance shipping. However, speed, carbon emissions, and accidents are some significant drawbacks to rail transport.

  • Truck – while the most limited oil transportation method in terms of storage capacity, trucks have the greatest flexibility in potential destinations. Trucks are often the last step in the transport process, delivering oil and refined petroleum products to their intended storage destinations.

  • Ship – where oil transport over land is not suitable, oil can be transported by ship. A typical 30,000-barrel tank barge can carry the equivalent of 45 rail tank cars at about one-third the cost. Compared to a pipeline, barges are cheaper by 20-35%, depending on the route. Tank barges traditionally carry petrochemicals and natural gas feedstocks to chemical plants. The drawbacks are typically speed and environmental concerns.