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What Is Heating Oil? Everything You Need to Know

what is heating oil

There are many different ways to heat a home. According to the U.S. Census Bureau’s 2022 American Community Survey, the most common home heating fuel is utility gas, aka natural gas, which is piped into your house by underground lines. The second most popular is electricity heating, which is particularly common in the South and Southwest. Third is propane, account for 4.9% of all households’ heat in the U.S.

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In fourth place is heating oil, with over 5.3 million households relying on this for their residential heat — or 4.25% of all homes in the country. While heating oil is the fourth most common fuel nationally, on the state level, it is the preeminent heat source in most New England states and very popular in the Northeast — and Alaska as well.

But, exactly, what is heating oil? Read on for a detailed explanation of what residential heating oil is, how it works with home heating systems, and how it compares to other commonly used sources of heat.

What is heating oil?

Heating oil, also referred to as kerosene, is a derivative of petroleum utilized for warming residential and commercial spaces. This oil is produced by subjecting crude oil to elevated temperatures within a fractionating column, leading to its condensation at approximately 482–662 °F. Although heating oil shares similarities with diesel in terms of composition, it contains a higher sulfur content and is marked by a red dye, contrasting diesel’s green hue.

Heating oil is primarily marketed for operation in heating systems like boilers, furnaces, and water heaters. It finds its application in both residential settings and commercial spaces, including industrial facilities. This fuel is categorized into two main types: Gas oil and kerosene.

  • Gas oil, often referred to as red diesel or 35-second oil, is typically used in commercial and agricultural contexts.
  • Kerosene, known as home heating oil or 28-second oil, is a lighter variant predominantly utilized in residential heating.

The availability of heating oil is a byproduct of the refining process for other petroleum products. Heating oil’s production volume is dependent on the output of these primary products. In the U.S., heating oil is sourced both from domestic refineries and international imports.

Additionally, heating oil can be mixed with eco-friendlier substances, like animal fats or vegetable oils. This blend results in a cleaner-burning fuel, contributing to enhanced air quality.

What is heating oil compared to other heating fuels?

In the Northeast, heating oil is so ingrained in the culture that many locals might not even be aware that other parts of the country rely on different heating fuels. The U.S. Energy Information Administration reports that, in the winter of 2022-2023, just under 5 million American homes use heating oil for space heating, yet the types of heating fuels used vary widely across the U.S.

Natural gas

Nationwide, about half of all homes are heated with natural gas. Formed over millions of years, natural gas must undergo processing before it can be used. It’s naturally colorless, odorless, and tasteless, so for safety reasons, a substance called mercaptan is added to give it a distinctive smell, reminiscent of rotten eggs, which helps in detecting leaks.


Electricity serves as another method for heating homes in the U.S., despite being more costly. Electricity can be generated from a variety of sources and used in electric furnaces, which function similarly to a large hair dryer. These furnaces pull in cold air, heat it via electric heating elements, and then distribute the warmed air throughout the home via heating ducts.


Propane, or Liquified Petroleum Gas (LPG), is another heating option. It’s obtained through the processing of natural gas and petroleum refining, then liquified under pressure and stored in pressurized tanks similar to the ones used for gas grills. Propane is originally odorless, so a detectable odor is added as a precaution to alert people to leaks.

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How does heating oil work for home heat?

Heating oil is a crucial fuel in many home heating systems. It’s used especially in regions where cold weather requires efficient and reliable heating solutions.

The process begins when heating oil is delivered to a home and stored in a tank, which is usually located outside or in the basement. This oil is then drawn from the tank by a pump and passed through a filter to remove any sediment or impurities. The clean oil is then fed into the furnace or boiler where it will be used for heating.

Inside the furnace or boiler, the heating oil is atomized into a fine spray and injected into a combustion chamber. There, it is ignited by a burner, creating heat. This heat is then transferred to air or water. In the case of a furnace, the heated air is distributed throughout the home using a system of ducts and vents, effectively warming the living spaces. Boilers, on the other hand, heat water that is then circulated through pipes to radiators or underfloor heating systems, which radiate heat into the rooms.

what is heating oil

The efficiency of heating oil systems has significantly improved over the years, making them a cost-effective option for many homeowners. Modern heating oil systems are capable of achieving high levels of efficiency, with some converting up to 95% of the oil into usable heat. This not only ensures that homes are kept warm even in the coldest months but also helps in reducing heating costs and minimizing the environmental impact. Regular maintenance of the heating system, such as cleaning the burner and replacing the filter, is essential for maintaining this efficiency and ensuring the longevity of the system.

Oil heating pros and cons

Using heating oil as a fuel source for home heating comes with its own set of advantages and disadvantages, shaped by factors such as efficiency, cost, and environmental impact.

Advantages of heating oil

High energy content: Heating oil has a high energy density, meaning it produces a large amount of heat per gallon. This makes it an efficient fuel for warming homes, especially in regions that experience harsh winters.

Rapid heating: Systems that use heating oil tend to heat spaces quickly due to the fuel’s high energy content. This can make homes feel comfortable faster in cold weather compared to some other heating methods.

Availability: In areas where natural gas lines are not available, heating oil can be a readily available alternative. It’s particularly common in certain regions, like the Northeastern U.S., providing a reliable source of heat for many who live outside urban centers.

Safety: Although any fuel presents risks, heating oil is relatively safe in terms of storage and combustion. It is less explosive than gas and, in the event of a leak, poses less of an immediate hazard.

Disadvantages of heating oil

Price fluctuations: The cost of heating oil can be volatile, subject to changes in the global oil market. This can make budgeting for heating costs challenging for homeowners, as prices can spike due to factors beyond their control.

Environmental impact: Burning heating oil produces carbon dioxide, a greenhouse gas that contributes to climate change. Although modern systems can reduce emissions, heating oil is still less eco-friendly than renewable energy sources.

Maintenance and delivery: Unlike natural gas, which is delivered via pipelines, heating oil must be delivered by truck and stored in a tank. This requires homeowners to monitor their oil levels and schedule deliveries. Heating systems that use oil also need regular maintenance to ensure efficiency and safety.

Infrastructure and upgrades: Older heating oil systems may be less efficient than newer models or alternative heating methods. Upgrading to a more efficient system or converting to a different fuel source can be costly, although it may offer savings and environmental benefits in the long term.

In summary, heating oil can offer a powerful and efficient heating solution, especially in areas lacking natural gas infrastructure. However, its environmental impact, along with the need for regular maintenance and the potential for price volatility, are significant considerations for homeowners. Check out quotes from up to 5 propane dealers in your area today to get the best pricing on propane delivery.

What is heating oil vs gasoline?

Gasoline and heating oil are both petroleum-derived fuels, but they differ significantly in their composition, use, and production processes.

Gasoline is a light, volatile liquid primarily used as fuel for engines in vehicles. It is produced through the fractional distillation of crude oil. Further treatments can enhance its performance, such as octane rating improvement and the removal of impurities. Gasoline evaporates quickly at room temperature, making it highly flammable and requiring careful handling. Its composition is carefully regulated to reduce emissions that contribute to air pollution and smog.

Heating oil, on the other hand, is a heavier, less volatile fuel used primarily for heating residential and commercial buildings. It is also a product of crude oil distillation but is closer in composition to diesel fuel. Heating oil, however, has a higher sulfur content than diesel. And the amount of sulfur in heating oil has been increasingly regulated.

Heating oil is used in furnaces or boilers to generate heat, either by warming air or water, which is then distributed throughout the building. Unlike gasoline, heating oil’s demand peaks in colder months, and its storage and handling are less hazardous due to its lower volatility. Heating oil can also be blended with renewable fuels to create a cleaner-burning option, improving air quality and reducing dependency on crude oil.

What is heating oil vs diesel?

Diesel and heating oil are both derived from crude oil, but they are refined and used for different purposes, which leads to several key differences between them.

Diesel is formulated specifically for use in diesel engines. Diesel acts as a fuel that ignites under high pressure without the need for a spark. It’s used to power vehicles and equipment. It contains a mix of hydrocarbons that are slightly heavier than those in gasoline but lighter than those in heating oil. Diesel must meet strict purity and performance standards to ensure it runs efficiently in engines, minimizing wear and emissions.

In contrast, heating oil is used primarily for space heating and water heating in residential and commercial buildings. Its composition is similar to that of diesel, but it is often less refined, meaning it may contain more sulfur and other impurities that are less of a concern for its typical use in heating applications.

Diesel fuel often contains additives to improve its performance. These include cetane boosters for improved combustion and detergents to keep engines clean. Environmental regulations also require the reduction of sulfur content in diesel fuel to reduce emissions, leading to the widespread use of ultra-low sulfur diesel (ULSD) in many regions. Heating oil, traditionally higher in sulfur content, has seen similar regulations aimed at reducing its sulfur content to minimize environmental impact. The distinct dye added to heating oil, usually red, distinguishes it from diesel and indicates that it is not subject to the same taxes as diesel fuel, making it illegal to use in on-road vehicles.

The price of diesel is generally higher than that of heating oil due to the additional refining processes and the taxes imposed on transportation fuels. This price difference is also influenced by the demand patterns, with diesel demand being more stable and influenced by transportation needs, while heating oil demand fluctuates seasonally, peaking during colder months. From an environmental perspective, the push for cleaner diesel technologies and fuels has reduced the emissions and impact of diesel engines significantly. Heating oil’s environmental impact, while mitigated by regulations on sulfur content and the availability of biofuel blends, remains a concern due to carbon dioxide emissions and the potential for spills affecting soil and water.

Both fuels are essential to their respective sectors—diesel for transportation and heavy machinery, and heating oil for residential and commercial heating. Advances in fuel technology and environmental regulations continue to shape their development and use.

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