Terahertz time-domain spectroscopy (THz-TDS) was used to detected the trace crude oil mixed into the sands away from wells due to the high sensitivity to polar substance. A linear model was established between the trace crude oil concentration and the terahertz attenuation coefficient. Effective-medium theory was introduced to confirm the linear relationship between the terahertz dielectric constant and the crude oil content below 200 ppm. The research suggests that terahertz time-domain spectroscopy can be an effective method for detecting the trace crude oil leakage in sands.