Agarwood oil / Oud oil is distilled from agarwood and extracted from selected wood of Aquailaria by steam distillation.

The resin-embedded wood is valued in Arabic-middle eastern culture for its distinctive fragrance, and thus is used for incense and perfumes.

The aromatic qualities of agarwood are influenced by the species,  geographic location, its branch, trunk and root origin, length of time since infection, and methods of harvesting and processing.

One of the main reasons for the relative rarity and high cost of agarwood is the depletion of the wild resource.