buying a home with oil heat

What You Should Know about Heating Your Home with Oil

This is the number one question we get. Is it safe? Heating oil is not flammable in liquid form, and your tank will not explode. Nothing would happen if you dropped a lit match into an oil tank. The match would just extinguish.

What is Heating Oil?

Residential heating oil is essentially the same as diesel fuel at the gas station. Heating oil starts as crude oil (petroleum/fossil fuels) in the ground. After it’s removed from the ground, it’s distilled into gasoline, jet fuel, heating oil, and other petroleum-based products. Then, it’s further refined to remove impurities.

A furnace is an HVAC system that uses fuel (sometimes oil), a combustion chamber, a heat exchanger, and a fan to generate and distribute warm air.

Fun fact: heating oil is red because of an IRS rule. The IRS taxes gas and oils used on the road. Non-road gases and oils such as residential heating oil get dyed red to show they’re exempt from federal, state, and local road use taxes.

Fun fact: Approximately 85% of heating oil used in the United States is used in New England.

Is Heating Oil Safe? (Will an oil tank explode?)

This is the number one question we get. Is it safe? Heating oil is not flammable in liquid form, and your tank will not explode. Nothing would happen if you dropped a lit match into an oil tank. The match would just extinguish.

Is Oil Heat Expensive?

Oil heat is generally considered the most expensive heat. As of this writing, oil heat is over $4 a gallon. Plus, most oil delivery companies have a minimum delivery of between 50 and 150 gallons, with 100 being the most common. So, today, oil delivery costs a minimum of about $400. However, most residential oil storage tanks are 275 gallons. This means an empty tank costs over $1000 to fill up.

However, the cost difference is negligible when you factor in the benefits of oil heat.

How Long Does Heating Oil Last?

The size of the home, its insulation levels, the exterior temp, and the efficiency of the oil furnace determine how long your oil will last. General estimates based on average homes usually hover around 3-5 gallons daily. Translated to dollars, this means about $12-$20 a day, or about $400-$500 a month. However, it can be less here in Richmond, where warm winters are not uncommon. In New England, where oil is prominent and temperatures are low, they may go through a full tank in the coldest months.

Are Oil Furnaces energy-efficient?

Many people envision ancient gas guzzlers when they think of an oil heat system. However, Many newer models have an AFUE rating (annual fuel utilization efficiency) between 80 and 90.

Plus, efficiency isn’t the only factor to consider. Oil delivers much more heat at higher temperatures than gas. Still, most experts agree that oil heat, on average, costs more than gas heat.

How do you get oil delivered to your house?

Most areas have several local oil delivery companies to choose from. Google “oil delivery near me” to see your local options. Woody’s Fuel Oil and Woodfin are two good options here in Richmond.

Pros and Cons of Residential Heating Oil

Pros of Oil Heat

Better Heat

Oil heat is better heat. One gallon of oil produces 35 percent more heat than the equivalent of gas. Plus, oil heat is much hotter. This means achieving a warmer, cozier house much quicker and with less fuel than natural gas. Sometimes, homeowners familiar with oil heat think that a natural gas heating system is broken or deficient because of the lower amount of heat.


Oil is safer than natural gas or propane because the risk of carbon monoxide is much lower. Plus, there are no chances of an explosive gas leak.

Life Span

Oil furnaces generally last longer than their gas counterparts. While oil furnaces regularly last 30 years or more, the average lifespan of a gas furnace is about 15-20 years.


When your home has natural gas, you are locked into whatever price the natural company charges. Even with propane, you often don’t own the tank, so you are locked into the propane price from the company you lease the tank from. However, when your home has oil, you can shop at all local delivery companies for the best price. You can also try to top off during the slower months when prices are lower. Don’t expect massive price differences, but you can usually save several dollars per fill by shopping around.

Lower Equipment Cost

Natural gas furnaces cost about 15-20 percent more than oil ones. So, if you are considering keeping your oil system, lower equipment costs are beneficial.

Cons of Oil Heat

Oil Price

Because oil is a denser energy source and produces more heat than gas, it’s more expensive than other home fuel types. While there are many factors to consider, oil tends to be the most expensive way to heat your home.

More Maintenance

An oil-fired furnace needs more regular maintenance than natural gas heating systems. Oil itself is not necessarily “dirty”. However, it sits in delivery trucks and your storage tank for a long time. Over time, the oil collects water, bacteria, dirt, etc. These contaminants clog up and dirty the fuel lines, filter, oil pump, nozzle, oil burners, and combustion chamber. So, you should expect regular service calls for cleaning and tuning up your system.

In addition, an oil furnace chimney gets much dirtier than a gas furnace vent pipe. Most gas furnace owners never have their vent system cleaned. However, expect soot build-up in your chimney that needs to be swept yearly at a minimum.


You never have to worry about “running out” of gas and electricity. On the other hand, with oil, you’ll need to keep an eye on your oil level or sign up for automatic delivery. Oil companies tend to get slammed before big storms; if you’re running low, you could run out before they can get to you.

Price Volatility

Just like gas prices at your local gas station constantly fluctuate, home heating oil prices always fluctuate. This can make it challenging to plan and budget your energy bills.

What About Underground Oil Tanks?

If you’re buying a home with an underground oil tank, you’ll want to know its condition and if any oil has leaked into the surrounding oil. This is not included in a home inspection, but environmental companies specialize in these assessments. Commonwealth Environmental is an excellent company in Richmond.

What if there is an oil leak or spill?

Luckily, residents in Virginia benefit from the Virginia Petroleum Storage Tank Fund. In short, under most circumstances, homeowners will be reimbursed for oil leak clean-ups minus $500. You can get the information here at the Virginia Department of Environmental Quality.

What is Low Sulfur Heating Oil?

Ultra-Low Sulfur Heating Oil (ULSHO) is a refined heating oil with significantly reduced sulfur content compared to traditional heating oil. Creating ULSHO involves removing a substantial portion of the sulfur present in the oil during the refining process. The result is a product that emits fewer pollutants when burned.

For you, this means more efficiency and less emissions and maintenance. The best part is that ULSO is compatible with all existing oil systems.

Bottom Line

When buying a home, you also commit to a home heating system and a fuel type. With oil, you’re looking at higher fuel bills and more maintenance. You’ll also have to arrange oil delivery from a local heating oil company. On the bright side, it’s a very cozy and satisfying heat; your system will last longer and be cheaper to replace.

That’s it in a nutshell.