What Is an Oil Depot?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 12 January 2020
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The term oil depot refers to a facility that is specifically meant to store crude oil derivatives that generally serves as a place from which the products can be kept, pending further distribution to dealers and, eventually, final consumers. As can be expected of any large industrial plant that is meant for such a purpose, an oil depot usually has many storage areas for the products that include tanks that may be constructed underground or at the surface level within the facility. As part of the application of strategic positioning, the oil depot may be built in close proximity to an oil refinery that processes or refines the crude into the different products that include kerosene and other output like diesel.


The process by which an oil depot receives the oil is varied and is not just dependent on a single method. For instance, depending on the location of the depot, it could receive its supply of oil from oil tankers, which are usually trucks equipped with tankers to enable them to transport the oil from the refineries to the particular oil depot that owns the consignment of oil. In some cases, the oil may be dispatched from the refinery through the use of a direct pipeline that is fed from the oil refinery to specific points that eventually connect to the oil depot. Usually, owners of gas stations will purchase the oil from the depot and have it transported to their storage facility on the premises of the station. Sometimes, the oil depot will dispatch its own tanker to deliver the oil for an extra fee, or the gas station management will make its own arrangements regarding the transportation, a process that will involve sending its own tankers to the depot to be loaded with the oil.

An oil depot may be owned by independent contractors who simply lend oil companies the use of their premises for the storage of the material. Such places may be desirable due to their strategic location to the oil refinery. For example, a business person with foresight might convert a property that is conveniently located near an oil refinery into a storage facility, in which sense the refineries will patronize them based on the perceived advantage. The oil refineries may also own such places, or they may be owned by other corporate interests.


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