In order for petroleum deposits to form, the first requirement is a source of abundant hydrocarbons, most usually from a mudstone that was deposited under highly reducing conditions. In such an environment dead organic matter can accumulate without complete decay and oxidation to form a source rock or black shale. The next step comes from burial and heating until the dead matter matures to release liquid and gaseous hydrocarbons. In turn these fluids, along with heated water, must leave the impermeable source rock and migrate through more porous and permeable strata, such as sandstone or limestone reservoir rocks. Either they reach the surface to escape or become trapped in some kind of geological structure. In migrating, the hydrocarbons induce reducing condition in the rocks through which they flow, often bleaching them as the colouring agents based on insoluble iron-3 compounds are reduced to iron-2 that dissolves and is carried out of the system along with the hydrocarbons.
Throughout the Precambrian, the Earth was lacking in free or dissolved oxygen, even after the Great Oxidation Event at around 2.4 to 2.1 billion years ago; ideal conditions for the formation of black-shale source rocks. And indeed there are huge volumes of them going back to the Palaeoarchaean Era (>3.25 Ga). The Earth’s heat flow having be greater then, due to less decay of radioactive heat-producing elements in the mantle, petroleum must have been generated in volumes at least as large as that released during the Phanerozoic. Yet there are few oilfields of Precambrian age, and geologists usually don’t bother looking for oil in very ancient rocks, largely because the older a rock sequence is the more likely it has been deeply buried and heated above the temperature at which oil breaks down into hydrocarbon gases (~130°C), which in turn are destroyed above about 250°C. Moreover, many such ancient rocks have generally been deformed by many phases of brittle tectonic processes that formed zones of fracturing that give lines of easy escape for pressurised fluids.
So, looking for telltale signs of oil formation and migration in Precambrian strata is pretty much a matter of academic curiosity. Solid, bituminous hydrocarbons granules and veins are not uncommon in Precambrian sediments, although their relationships do not rule out later introduction into ancient rocks. Birger Rasmussen of the University of Western Australia has been tracking down such signs for over 30 years, his best known discovery – in 2005 – being in Archaean rocks (3.2 to 2.6 Ga) of the Pilbara craton in Western Australia. Recently, he and Janet Muhling of the same institution reported stunning evidence of migration in the Palaeoproterozoic Era (Rasmussen, B. & Muhling, J.R. 2019. Evidence for widespread oil migration in the 1.88 Ga Gunflint Formation, Ontario, Canada. Geology, v. 47, p. 899-903; DOI: 10.1130/G46469.1). The sedimentary unit is a banded iron formation containing interleaved cherts (famous for their content of some of the oldest incontrovertible microfossils), a granular variant of which is pervaded by solid bitumen in both granules and former pore spaces. This is interpreted as the result of oil migration during the actual cementation of the ironstone by silica; i.e. during diagenesis below the seabed rather than through solid sedimentary rock. Bitumen also fills later fractures. Rasmussen and Muhling consider the most likely scenario for this undoubted Palaeoproterozoic reservoir to have formed. They conclude that it coincided with the tectonic burial of the BIF basin beneath an exotic thrust block about 20 Ma after its formation. This generated petroleum from older source rocks, remote from the site of BIF deposition, that migrated away and up-dip from the thrust belt following the unconsolidated BIF formation.