Most petroleum geologists prefer theories of oil formation, which holds that oil originated in shallow seas as vast quantities of marine plankton or plant materials died and sank into the mud. Under the resulting anaerobic conditions, the resulting organic compounds remained in reduced state. Under these conditions, anaerobic bacteria converted the lipids (fats, oils and waxes) into a waxy substance called kerogen.

As the source rock was buried deeper, overburden pressure raised temperatures into the oil window, between 80 and 180 °C. Most of the organic compounds degraded into the straight-chain hydrocarbons that comprise most of petroleum. This process is called generation kitchen.[citation needed] Once crude oil formed, it became very fluid and migrated upward through the rock strata. This process is called oil expulsion. Eventually it was either trapped in an oil reservoir or oil escaped to the surface and was biodegraded by soil bacteria.

Oil buried deeper entered the "gas window" of more than 160 °C and was converted into natural gas by thermal cracking. Thus, theory predicts that no oil will be found below a certain depth, only unassociated gas. At greater depths, even natural gas would be pyrolyzed.