The undersea rocks along Santa Barbara Channel are a textbook example of petroleum formation. First, huge thicknesses of coarse sediment are laid down from the erosion of the rapidly uplifting Santa Ynez Mountains; at the same time, the waters of the channel are tremendously fertile, raining large amounts of dead organic matter onto the sediments. The sediments become rock, and over a few hundred thousand years, more or less, the organic matter within them is slowly cooked into petroleum.
The same tectonic compression that pushes up the mountains crumples and tilts the seafloor rocks, and the crude oil finds openings in the coarse sandstone to trickle upward. (The saturated sandstone is oil sand.) If it reaches the sea floor, globs of it rise into the water and float ashore, fouling surfers and seals alike. If not, it may pool in oil-saturated zones where the rocks are folded into dome-shaped traps.
Oil drillers look for these petroleum traps. Santa Barbara Channel once supported major oil production, but large-scale accidents in the 1960s put an end to that. Ever since, proposing offshore oil drilling is a political death sentence in California.
Oil seeps occur on land, too, although there the product is usually asphalt. The first oil wells in America were drilled near seeps in western Pennsylvania in 1859. Another well-known example is the tar pits of Rancho La Brea, near downtown Los Angeles. Learn more about petroleum starting at Petroleum in a Nutshell.