With the problem of more and more severe world energy shortage, much attention is paid to the application of marginal cost analysis to the oil industry. Combined with particular characters, the definition of marginal cost in oil industry is given with the quantitative formula. Taking a certain oil field as an example, practical computation is carried out, and the results coincide with general rules of marginal cost theory. Further researches are also made towards the use of marginal cost analysis to our natinal oil industry with considering the specific situations of our country. A new method is thus given for determining price and output of crude oil under the new economic running system.
