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To answer this question, it is important to understand how oil is used.
As a Fuel. Oil holds a lot of energy which can be released by burning it. It is certainly possible to use other power sources (renewable energy, nuclear energy, coal etc.) It is also possible to produce biofuels, which apparently (for now) takes more effort than extracting oil from the ground and producing fuel from that.
For extracting chemicals. Many things are actually produced from chemicals extracted from oil, such as plastics. Some of these chemicals may be produced or extracted in other ways, others may not.