Oil

is a hazardous object in. When one tile of oil interacts with either fire, a burst of flame, an explosion, or a cigarette lighter, it will instantly be lit on fire (along with all other oil tiles adjacent to it about 0.5 seconds later), spreading through the entire puddle. After about 20 seconds, the fire will dissipate and the oil puddle will be gone.

Oil is only found naturally in the Industrial area, where puddles of oil can be found on the ground throughout each floor. It can also be placed manually by using an oil container. This allows you to light a single area on fire very quickly.

Extinguishing
Burning oil can be put out with water, a Water Cannon, a Fire Extinguisher, or Fireproof Skin +. When doing so, the fire and oil on that tile will immediately disappear — even if the oil had been lit only moments earlier.