Oil is formed many years before it is ever actually called oil. It is something that takes very long, and specific circumstances have to be just right for it to form. The way crude oil is created is that tiny plants and remains of animals like zooplankton and Algeo fall the ocean bottom and die. They are trapped under layers and layers of mud and sand. Over time, they become crude oil that is processed and used as we know it today. It is simply amazing, and it's very profitable too.
There are cetain areas of the world, like the Middle East that has the perfect conditions for oil to form. It has sand, and over time, all was just right for much oil to form, and that is why there's so much of it there. Other areas, like Alaska, have conditions that were favorable for it as well and even parts in the United States, like Texas. There is oil in the ocean bottoms, too where it was formed many years ago and is used today.