The Oil Sand is an ore added by Thermal Foundation. It can be used to gain Bitumen and Tar, and it comes in two variants: normal Sand and Red Sand.
It spawns uncommonly in deserts, between height 10 and 80. Rarely it can appear underground also in larger quantities, then inside the ore blocks there is also some crude oil. When the sand is mined, it drops 1 Bitumen and some crude oil comes out. But this is only decoration and cannot be picked up. A Fortune enchantment increases the amount. If the block is mined with Silk Touch , no oil comes out and it can be used in various thermal expansion machines: