What is the primary function of transformer oil in power equipment?

Transformer oil has two primary jobs: electrical insulation and heat removal. As an insulating liquid, it increases dielectric strength around energized parts and helps prevent arcing and partial discharge, especially at high voltages. As a coolant, it transports heat from the windings and core to radiators or coolers so the transformer stays within thermal limits. Oil also supports arc quenching in tap changers and helps protect solid insulation by limiting oxygen and moisture exposure when the system is well sealed. Its condition directly affects reliability and allowable loading.