Oily sludge is a major hazardous waste generated in the petroleum and petrochemical industry. The increasing accumulation of oily sludge necessitates safe and sustainable management. In recent years, pyrolysis has gained great attention as an effective treatment method for oily sludge. However, a comprehensive environmental assessment of industrial-scale oily sludge pyrolysis remains limited. Based on the life cycle assessment (LCA) method, this study employs data collected from oily sludge treatment plants to investigate the environmental impacts of the whole pyrolysis system, specifically its carbon footprint. The utilization and final disposal of pyrolysis products are in accordance with the real industrial operations. The contributions of each unit process in the pyrolysis treatment of oily sludge to global warming potential (GWP), as well as the decarbonization pathways, are explored in detail. Results indicate that, in general, pyrolysis has lower adverse environmental impacts than incineration does. Within the pyrolysis system, processes such as pyrolysis, flue gas purification, and hot washing are major contributors to GWP. The recycling and utilization of pyrolytic oil and solid residues can significantly mitigate the adverse environmental impacts of oily sludge pyrolysis. Given the combined applications of co-pyrolysis, green electricity, and other low-carbon technologies, the carbon footprint of oily sludge pyrolysis could be reduced from 635.9 to 31.8 kg CO2-eq in the most ideal scenario.