American Petroleum Institute the oil industry's trade association. The API, through its research and engineering work, establishes operating and safety standards for all segments of the petroleum industry; issues specifications for manufacture of pipe, pressure vessels, and other equipment; and furnishes statistical and other information to government agencies having to do with the industry. the American Petroleum Institute. Founded in 1920, this national oil trade organization' is the leading standardizing organization on oil-filed drilling and producing equipment. It maintains departments of transportation, refining, and marketing in Washington, D.C., and a department of production in Dallas. 2. (slang) indicative of a job being properly or thoroughly (as, "His work is strictly API"). 3. (slang) when used sarcastically, indicative of substandard performance that is predictable or usual (as, "It's API for that engine to be broken down"). 4. degrees API; used to designate API gravity.