I think it may actually be cheaper and easier in that particular level to just build an elevator and take down the empty barrels myself. How does the pump work? does it just spray the oil out on the surface or something? Does it automatically fill the barrels somehow?
I haven't personally tried to use pipes or pump oil, but I will try it now. By the way, you know how to bring objects and things into your house, like a chopped tree for example?
You have to connect an output pipeline to where you want the liquid to go, otherwise it will just spray it up on the surface. Or maybe it just won't pump, I can't remember.
If you want to sell oil, connect the pipeline to your house and buy lots of barrels. As they fill up, sell them, and use the money to buy more.
I don't know if Clonk Rage still has the oil derrick, but if it does, just use the pump instead because it's a lot easier. Only use the oil derrick if you've got LOS on the oil, you know exactly where to put the derrick on the surface, there isn't any rock in the way, and it's too long for the pump pipeline to reach. Then again, they might have changed oil derricks and made them suck less.