When should transformer oil be replaced instead of treated?

Replace oil when contamination cannot be removed to specification, when additive system and oxidation stability are irreversibly degraded, or when banned substances (like PCBs above limits) make reuse illegal or impractical. Replacement is also considered when oil has severe sludge formation, high acidity that persists after treatment, unacceptable corrosive sulfur risk, or repeated rapid deterioration that indicates underlying active faults or incompatible materials in the transformer.