The main difference is peppermint oil is pure concentrated oil taken from the stem and leaves of the peppermint plant. Peppermint extract is a mixture of pure peppermint oil and a medium that helps carry flavor.
The pure concentrated oil from the peppermint is known as an essential oil. This essential oil is collected via steam distillation, in which the peppermint plant is exposed to high temperature, high-pressure steam. The vapor produced by the evaporated oils from the plant then cools and condenses before being separated and collected.
Peppermint extract can be made by soaking peppermint leaves and stems in alcohol or by diluting peppermint oil in alcohol. Using the alcohol distillation method causes the extract to become less potent than the essential parent oil.
Peppermint essential oil is four times as potent as peppermint extract and generally requires only a small amount to achieve results. Naturally containing menthol, menthone and menthyl esters, peppermint oil is suitable for use in toothpaste, chewing gum, cigarettes and shampoo.
Peppermint extract is more widely used in cooking due to its low potency. Peppermint extract is mainly used to add a minty flavor to foods ranging from baked good to candies. Peppermint extract is also an ingredient in some soaps and shampoos for its aromatic properties.