What type of oil is used in electric transformers and why?

Electric transformers most commonly use mineral insulating oil because it is cost effective, provides strong dielectric strength, and has good cooling characteristics with well understood aging behavior. Where fire risk and environmental sensitivity are higher, natural esters and synthetic esters are increasingly selected due to higher fire points and better biodegradability. Silicone fluids are used for specific fire safe indoor or special applications. The chosen oil must be compatible with transformer materials and meet required standards and performance targets for the unit’s voltage and thermal duty.