Transformer oil is one the significant component in oil filled transformers. Transformers oil filtration experts determine the life expectancy and efficient performance of the transformer on the basis of the oil used in the device. The oil serves two critical functions:  
It creates an acceptable level of insulation when combined with insulating materials used in the coils and conductors. Transformer oil also serve the purpose of coolant that absorb heat from the core and the windings
Manufacturers use hydrocarbon mineral oil for transformer. The insulating oil is usually obtained by fractional distillation and successive treatment of crude petroleum. This is why it is known as mineral insulating oil. It preserves the winding and core as these are completely immersed in the oil and it prevents direct contact of oxygen present in environment with cellulose made paper insulation of windings as it is prone to oxidation. Types of transformer oil used by experts: There are two types of transformer oil used by engineers: 1. Paraffin based transformer oil 2. Naphtha based transformer oil