Air compressor oil is a specific type of lubricant that serves various purposes in an air compressor. Depending on the type of compressor, it may act solely to lubricate the various bearings and other moving parts, or it may also play a role in cooling the compressor down and helping to create a seal between its various parts.
Not all piston driven air compressors require oil, but in those that do, the oil works to keep the piston pins, cylinder bearings, main bearings and the inside of the compressor cylinder lubricated. In this type of compressor, the oil also plays an important role in preventing rust, as water often condenses inside the compressor as it cools down.
The other major type of air compressor is a screw-type, and all of these compressors require oil. In these compressors, the oil also is necessary to help cool the screw mechanism down, otherwise the screw would likely be destroyed by the excessive heat.
In the past, most air compressor oils were made from petroleum, although as of 2014, nearly all oils are synthetic. Synthetic oils are used because they are able to last much longer, often providing as much as 8,000 hours of running time, compared to only about 1,000 hours with petroleum based oil.