Transformer oil or insulating oil is usually a highly refined mineral oil that is stable at high temperature and has excellent electrical insulating properties.

It is used in oil-filled power transformers, some types of high voltage capacitors, high voltage switches and circuit breakers.Its function is to insulate, suppress corona and arcing, and to serve as a coolant.

The oil helps cool the transformer. Because it also provides part of the electrical insulation between internal live parts, transformer oil must remain stable at high temperature for an extended period. To improve cooling of large power transformers, the oil filled tank may have external radiators through which the oil circulates by natural convection. Sub standard & inferior quality of oil can harm the equipment in many ways and ensure to use only genuine and standard oil procured from reliable source only.

The easiest way to explain the reasoning for proper transformer oil maintenance is to compare a Transformer to a car. A car requires oil for lubrication while a Transformer requires oil for insulation and cooling. Just as a car requires regular checks of both oil quality and oil level, a transformer requires the same proactive treatment. Oil in each instance degrades over time resulting in the potential for failure or costly repair bills.