The oil industry is in search of the stable chemicals that can be applied in drilling, stimulation, enhanced oil recovery at high temperature and high salinity reservoirs, unconventional heavy oil recovery by solvent extraction method, and flow assurance. This quest has opened a new category of research on ionic liquids. In the present review, an attempt is made to explore the ongoing research and development on the application of ionic liquids in the domain of upstream oil industry. The review provides a deep insight into the progress and status of current research, challenges and utilization of ionic liquids for drilling, stimulation, enhanced oil recovery, unconventional oil recovery, and flow assurance. It is found from the literature that ionic liquids can be used to prevent shale inhibition, improve clay stabilization and drilling fluid properties, compose fracturing fluids, control wax and asphaltenes deposition, prevent gas hydrate formation, increase additional oil recovery, and improve unconventional oil recovery. It is also expected that the current review will open new avenues for the budding researchers and engineers to utilize ionic liquids in upstream oil and gas industry and to acquire profound ideas for its way forward.