From a global perspective, fossil energy remains the main source of energy supply. For fossil energy development, the petroleum industry has high requirements regarding the detection and monitoring of various gases, which are important for environmental protection and safe production. Tunable diode laser absorption spectroscopy (TDLAS) is a type of trace gas detection technology with advantages of high sensitivity, good selectivity, fast response, and availability for multispecies and multiparameter measurements. It can be widely used for detecting gas volume fraction in the petroleum industry site and monitoring the leakage of hazardous gas. This paper presents, classifies, and summarizes the principle and various detection methods of TDLAS. Furthermore, the application of TDLAS for on-site gas detection in the petroleum industry is reviewed, including detection for flammable and explosive gases (methane, ethane, propane, butane, acetylene, and ethylene), toxic gases (hydrogen sulfide and carbon monoxide), and other gases (oxygen and water). The current applications of the TDLAS standoff detection technology are summarized and future development areas of the TDLAS technology in the petroleum industry are outlined.