Waste oil that is properly disposed of at a designated oil recycling point is refined and reused in petroleum products, or burned for energy, which helps reduce the impact of oil usage on the environment. Many oils are filtered and cleaned in processes that return the oil to near-virgin quality.
The preferred method of recycling waste oil is by the complete removal of all contaminants and moisture through filtration and distillation processes. This results in a completely pure oil base that is nearly indistinguishable from unused virgin oils. These recycled oil products must meet the same standards as any new oil on the market as specified by the American Petroleum Institute.
Industrial sites such as factories and machine shops often use on-site oil reconditioning systems to clean used oil. This process returns a majority of the used oil to a usable state for future use, reducing both the amount of waste oil generated and fresh oil consumed.
In some cases, waste oils are purged of moisture and particulate before being burned as an energy source. This method of oil recycling is considered a last choice due to the fact that burned oil cannot be used again in the future but produces cheap heat and fuel. Similarly, some waste oils are used in the production of gasoline at petroleum refineries.