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Oil shale, an organic-rich fine-grained sedimentary rock, contains significant amounts of kerogen (a solid mixture of organic chemical compounds) from which technology can extract liquid hydrocarbons. The name oil shale represents a double misnomer, as geologists would not necessarily classify the rock as a shale, and its kerogen differs from crude oil. Kerogen requires more processing to use than crude oil, which increases its cost as a crude-oil substitute both financially and in terms of its environmental impact.

Deposits of oil shale occur around the world, including major deposits in the United States of America. Estimates of global deposits range from 2.8 trillion to 3.3 trillion barrels (450×109 to 520×109 m3) of recoverable oil.

The chemical process of pyrolysis can convert the kerogen in oil shale into synthetic crude oil. Heating oil shale to a sufficiently high temperature will drive off a vapor which processing can distill (retort) to yield a petroleum-like shale oil—a form of unconventional oil—and combustible oil-shale gas (the term shale gas can also refer to gas occurring naturally in shales). Industry can also burn oil shale directly as a low-grade fuel for power generation and heating purposes and can use it as a raw material in chemical and construction-materials processing.

Oil shale has gained attention as an energy resource as the price of conventional sources of petroleum has risen and as a way for some areas to secure independence from external suppliers of energy. At the same time, oil-shale mining and processing involve a number of environmental issues, such as land use, waste disposal, water use, waste-water management, greenhouse-gas emissions and air pollution. Estonia and China have well-established oil shale industries, and Brazil, Germany, Israel and Russia also utilize oil shale.