The Black oil is an alien sentient viral lifeform. It appears as a liquid with the consistency of crude oil which can move on its own. It is able to hibernate for periods of thousands of years, preferably in petroleum deposits. It can absorbs itself into other beings, sometimes appearing to move directly under the skin and over the eyes of the victim. Reaching the third ventricle of the brain, it can take control of its host. It is able to kill opponents by generating massive doses of radiation, while shielding its host from injury. While Black oil is known to be able to switch host on a whim, it contains the genetic blueprints for a Gray type alien which it can incubate into its host. Once incubated, a host gestates within 96 hours an immature alien form, and is killed in the process.
The Black oil’s origins are unknown. It may have originated on Earth or on another world. On Earth, It is known to have lived in a tall ang aggressive primitive humanoid reptilian lifeform with fangs, claw, and yellowish scaled skin at some point during Earth’s past and made them evolve into Gray type aliens. Those, referred to as the Colonists, are generally believed to have abandoned the planet at the latest during the last great ice age for undetermined reasons. They came back to Earth at some point and have monitored the planet for some time, awaiting for an opportune moment to reclaim it. In 1947, one of their ships crashed in New Mexico, with the crew dying from exposure to magnetite. This lead a group of human power brokers to learn of the Colonists' plot to retake the planet and, early during the Cold War, forged an alliance with them around the agreement that a small group of humans would be allowed to survive the invasion by becoming alien-human hybrids. The date for recolonization was set for 2012, and work began to create an hybrid. In exchange for their cooperation, the Colonists allowed them limited military use of their technology, and promised that their heirs, who were turned over to the Colonists as an act of good faith, would survive the takeover. Meanwhile, both sides worked secretly against the other; with the human conspirators attempting to develop a vaccine for the alien virus and the Colonists setting up the Black Oil to "birth" a new alien being within the human body as its incubator.
Source: Chris Carter "The X-Files"