Why is oil cooling used in power transformers?

Oil cooling is used because oil can transfer heat efficiently while also serving as a high dielectric strength insulation medium. The oil fills voids, suppresses partial discharges, and moves heat from windings to radiators or coolers. Compared with air, oil supports higher voltage stresses and higher power density, enabling compact designs at high MVA ratings. It also helps manage hot spot temperatures, which directly influence insulation life. When paired with forced oil and forced air systems, cooling capacity can be increased significantly for peak loading without changing the core and winding design.