Do electrical transformers have oil in them and why?

Many medium and high voltage transformers use oil, but not all transformers contain oil. Oil filled transformers use insulating fluid to provide dielectric strength and remove heat from windings and core. The oil also suppresses partial discharge and protects paper insulation from rapid aging by maintaining stable thermal conditions. Dry type transformers use air and solid insulation instead of oil, often preferred indoors for fire and environmental reasons. The choice depends on rating, environment, and safety requirements.