Oil is the strategic resource of the game. It is used in the creation of airforce and tanks. These are two important factors in war, bombing your opponents and improving your equipment. Oil is also necessary for powering the economy through factories. Oil can also act as an investment, you can buy or sell oil repeatedly, but you may not do the opposite action for the rest of the turn. Selling oil will result in decreasing the global price by 1k while buying oil will result in increasing the global price by 1k.
Each country has reserves of oil which it can tap into. For non-Middle East nations each prospect will result in 50-500 Mbbl of oil (Which can then be mined), while Middle-East nations will result in 1000-5000 Mbbl of oil per prospect. This oil will then be added on to the discovered oil reserves in your profile. The price of each prospect is (number of prospects+1)^2*1000. So the first prospect costs 1'000, then 4'000, then 9'000...
Oil Production and Uses
This is the amount of oil you produce each turn. Oil produced is taken from your oil reserves. Your first oil well costs 400K, and each one after that costs 100K extra. The formula for oil costs is (number of oil wells you own-1)*100+500K. Oil acts as a soft cap to GDP, as you need it to power Factory as these increase Growth. Oil is also used in the production of airforce whose costs steadily increase. Oil is used for various things including purchasing or constructing military equipment, trade on the open market, maintaining growth, and conducting military operations. Oil can be bought on the open market, direct from players, received from events, or self produced. It can also be used like a bank in order to quickly earn money.
Importance of Oil
Having a good oil supply will keeps your nation from getting negative economic growth due to factories, and keeps your country's GDP growing roughly the constant rate. Without oil the country would be slow in growing.