Oils conduct electricity minimally under normal conditions, which makes them useful as insulators. The extent of electrical conductivity depends on the concentration of impurities. The presence of salts and other substances generally increases the electrical conductivity of oil.
The American Petroleum Institute classifies oils into five groups. Group I includes oils that have been mildly-refined and possess very low electrical conductivity. Group II is comprised of hydrogen-treated oils that also have low conductivity. Group III and Group IV are more highly-refined oils used primarily as industrial lubricants with low conductivity. Group V oils possess high electrical conductivity and are not suitable for use as base oils because the electrical discharges can damage system components.