Oil companies are largely responsible for producing a huge amount of petroleum sludge (PS), which is a major source of pollution in the environment. It is generated during oil extraction, processing, transportation, and cleaning activities. Environment Protection Act and Hazardous Wastes Handling Rules categorized petroleum sludge as hazardous waste because it consists of spent chemicals, wastewater, waste oil, mineral matter, and contaminated sand. This PS cannot be disposed of in a landfill, even after it is effectively de-oiled. However, PS treatment and disposal are serious threats for most refineries. Thus, the treatment became crucial. In this paper, a comprehensive review of PS sources, characteristics, environmental effects along with the comparative analyses of available thermal and disposal methods of PS treatment are presented. This review paper could enhance the essential knowledge and future guide for PS thermal and disposal techniques. © 2020 The Authors.