Why Is Oil Measured In Barrels?

Crude oil is the most crucial natural resource that is used for making petrol, plane fuels, and other petroleum products. The most common term used in measuring crude oil will be in barrels.

Oil-rich countries like Saudi Arabia have made huge profits from crude oil alone which is the main contributing factor to their country's GDP. So going back to the main question of why is oil measured in barrels instead of liters?

What is the true meaning behind using this? Is it referring to one barrel of oil or does it bring a different meaning? Here we would like to share with you the reasons why it's called that.

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What is Crude Oil

The first thing that you need to understand is that 1 barrel or every oil barrel contains 42 gallons(around 159 liters) of crude oil that is not filtered. From the 42 gallons of oil, every barrel is divided to be filtered and changed to certain products based on the percentage that has been set.

The capacity value of crude oil will be categorized according to this list;

Why the Unit 'Barrel" is Used?

For hundreds of years, barrels have been used to store wines which require them to be airtight and watertight.

Wooden barrels were made by taking into account the unit measurement known as tierce. This means that for every wooden barrel used to store wine, its capacity is known as one tierce which is equivalent to 42 gallons.

Following the huge popularity of the oil industry that was booming thanks to the discovery of kerosene oil in 1846, the needs for storage, measurement, and transportation of kerosene oil to fulfill the high demands of lights were deemed necessary.

In the beginning, most businesses did not have the same standards in selling kerosene oil as they simply use any containers that will ease the storage including the wooden barrels with the capacity of 1 tierce that has been used to store wine.

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Wooden Barrels As A Standard Capacity For Crude Oil

Because of that, the storage of oil using these 1 tierce wooden barrels quickly became popular due to their capability in closing tightly. Aside from that, the barrels also had manageable weights which are around 150kg for each full barrel.

The wooden barrels were easy to be carried around on top of a barge as well as on the carriages of trains since they can occupy 20 barrels in one unit. The total of 20 barrels in one way was considered sufficient relative to the cost of transportation on top of ease of management.

Starting in 1860 in Pennsylvania, the 42-gallon sized barrels were chosen as the standard capacity that must be adhered and this practice became the following of other businesses out there.

12 years later in 1872, Petroleum Producers Association officially made 42 gallons the standard measurement of one barrel of crude oil. Its use became a standard not only in the US but also across the globe.

To this day, we still use the measurement unit of 1 barrel and it is compared relative to the market price.

Source:

• Iluminasi

Also read: Countries with Largest Oil Reserves in The World