What I Knew Before Looking Into This
So I have an oil tank and an oil boiler. The tank holds about 3000 litres. It was already here when I moved in.
But here’s the thing — I normally only buy 500 or 1000 litres at a time.
To do this, I go to a broker or sometimes directly to a supplier. I enter the amount I want and my postcode, and a quote appears. Depending on how long I’m willing to wait for delivery, the price per litre changes slightly.
There are some people in the village who run an oil syndicate, which is quite clever — by ordering together they can often get a slightly cheaper delivery price.
Then, sometime before the agreed delivery date, a tanker shows up and pumps the oil directly into the tank.
That’s basically the entire end-user interaction.
Good
- I actually have more control over my cashflow. For example, I can front-load my energy by buying more when prices are lower.
- I’m not dependent on a network connection like gas.
- One less direct debit to worry about.
- My oil account is basically my bank account, so I keep the interest until I buy fuel.
Bad
- I can’t fix prices long-term.
- It’s not great for the environment.
- It stinks.
- Global shocks hit fast.
But Where Does Heating Oil Actually Come From?
Before writing this project, I realised something slightly embarrassing:
I had no idea how the oil actually got from the ground to my tank.
It turns out the supply chain is surprisingly simple.
1. Oil Extraction
Crude oil is extracted from:
- oil fields on land
- offshore oil rigs
These fields exist all over the world:
- Middle East
- North Sea
- United States
- Russia
- Africa
The oil is pumped out of the ground as crude oil, which is basically a thick mixture of hydrocarbons.
At this stage it’s not usable as heating fuel yet.
2. Transport to Refineries
The crude oil is transported to refineries using:
- pipelines
- oil tankers
- rail
- road tankers
For the UK, a large amount arrives via tankers into coastal terminals.
How Heating Oil Is Made (and Why It’s Slightly Different)
Inside the refinery, crude oil is heated in a tall distillation column. As the vapours rise through the column, they cool and condense at different temperatures. Each level produces a different fuel.
Very roughly, the products come out like this:
| Product | Typical Use |
|---|---|
| LPG | cooking and heating |
| Petrol (gasoline) | cars |
| Kerosene | aviation fuel |
| Diesel | transport |
| Heating oil | home heating |
| Heavy fuel oil | ships and industry |
Heating oil sits in the middle distillate range, alongside diesel and kerosene.
But this is where things get interesting.
Heating oil is usually less refined than road diesel.
Diesel sold for vehicles must meet stricter regulations because it is used in engines with emissions controls. It often goes through additional refining steps such as:
- hydrodesulphurisation (removing sulphur)
- additives for cold weather
- detergents for engines
Heating oil doesn’t need all of this because it is simply burned in a boiler.
Because of this:
- heating oil is usually slightly heavier
- it can contain more sulphur
- it is typically cheaper than road diesel
In many countries, heating oil is actually very close to diesel fuel, but dyed a different colour so it can’t legally be used in vehicles.
In the UK, heating oil is normally closer to kerosene (28-second oil), which burns cleaner in domestic boilers.
So while all these fuels start from the same crude oil, the final refining and regulation determine exactly what type of fuel ends up in your tank.
4. Fuel Terminals
Once refined, the heating oil is moved to fuel storage terminals around the country.
These are large tank farms where distributors collect fuel.
This is where your local supplier enters the picture.
5. Local Distributors
Local fuel companies buy heating oil in bulk from these terminals.
They store it in regional depots and deliver it using road tankers.
These are the tankers that show up at houses and farms.
6. Delivery to Homes
Finally the tanker arrives and pumps the fuel directly into:
- home tanks
- farm tanks
- commercial storage tanks
And from there it feeds:
- oil boilers
- central heating systems
- hot water tanks
Which brings us all the way back to your shower.
Why Global Events Affect It So Quickly
Because the first part of the supply chain is global.
If something disrupts:
- shipping routes
- oil production
- refinery capacity
the effects ripple through the entire system.
And eventually they reach the most mundane place imaginable:
my oil tank in the garden.
Gareth Winterman