Oil well casing will fail when the external pressure exceeds the internal pressure by a differential equal to the casing's rated __________.

Correct Answer: Option D — collapse pressure

Oil well casing experiences external hydrostatic and formation pressures. When external pressure surpasses internal pressure by a margin equal to the tubular's rated collapse pressure, structural plastic deformation or inward buckling of the pipe wall occurs, per standard oilfield drilling and MODU engineering operations.