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The formation of oil begins in warm, shallow oceans that were present on the Earth millions of years ago. In these oceans, extremely small dead organic matter - classified as plankton - falls to the floor of the ocean. This plankton consists of animals, called zooplankton, or plants, called phytoplankton.
Oil and natural gas are formed underground, over several to tens of millions of years, from prehistoric organisms decomposed by high subterranean heat and microorganisms. Oil and gas collect in formations underground, where they are prone to accumulate, to form oil/gas fields.
Both coal and oil are fossil fuels. That means they're formed from organic matter ? stuff that was alive on Earth millions of years ago ? that was covered by heavy layers of rock. Over time, the increased pressures and heat resulting from the overlying rock transformed the decomposed matter to coal or oil.
How is oil and gas formed? Tiny sea plants and animals die, buried on ocean floor and covered by sedimentary rock. Buried deeper over millions of years, heat and pressure turn them into oil and gas.
We call crude oil and petroleum fossil fuels because they are mixtures of hydrocarbons that formed from the remains of animals and plants (diatoms) that lived millions of years ago in a marine environment before dinosaurs existed.