How does oil cooling in a transformer manage heat dissipation?

Oil cooling works by moving heat away from windings and core to external radiators or heat exchangers. Hot oil rises (natural convection) and cooler oil falls, forming a circulation loop. In higher rating designs, pumps force oil flow through winding ducts to reduce hot spot temperature. Fans or water coolers increase heat transfer at radiators. By limiting winding hot spots and top oil temperature, oil cooling protects cellulose insulation life and helps keep losses and resistive heating under control during heavy load and overload events.