agarwood oil market

Agarwood oil, also known as oud oil, has captured the interest of perfumers, traditional healers, and enthusiasts for centuries. In this blog, we delve into the world of agarwood oil, unveiling its origin, applications, and its market potential.

What Is Agarwood Oil?

Agarwood oil is a fragrant oil derived from the resinous heartwood of Aquilaria trees. This tree grows only in India and Sri Lanka. It’s a very rare and precious oil extracted by the process of Steam Distillation. It grows alongside rivers and streams. Due to its sweet, woodsy fragrance that is suitable for aromatherapy products, soaps, skincare products, agarwood oil has become increasingly popular.

The Properties of Agarwood Oil

  1. Stimulant: accelerates physiological function
  2. Tonic – strengthens the body
  3. Anti-inflammatory: reduces inflammation
  4. Digestive: helps in the digestion of food
  5. Muscle relaxant: eases tension in muscles
  6. Analgesic – relieves pain
  7. Anti-arthritic – prevents arthritis
  8. Antipruritic – relieves or prevents itching
  9. Antimicrobial – kills or resists pathogenic microorganisms
  10. Febrifuge – combats fever

The Uses Agarwood oil

Agarwood oil is thought to have a variety of therapeutic effects and has been used for centuries in traditional Indian medicine. Agarwood oil is also used as an aromatherapy agent and as a perfume ingredient. Some of the key applications of agarwood oil includes:

  • Perfumery: Agarwood oil has high-end perfumery properties and a long-lasting aroma. It is used as a base note in many luxury fragrances.
  • Traditional Medicine: Agarwood oil holds high significance in treating common cold, cough, and flu symptoms. It also lessens sputum production, clears nasal discharge, and eases chest and nasal congestion. This oil is believed to be effective in addressing various health conditions, including anxiety, depression, stress, insomnia, remarkably, and even cancer.
  • Meditation practice: Agarwood’s aroma is used by practitioners to relax the mind and enter a condition of mindful awareness.
  • Home Fragrance: Agarwood oil is used to create luxurious home fragrances such as scented candles and incense sticks that add elegance to living spaces.
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Analyzing Key Market Dynamics

  • According to Polaris Market Research, the global agarwood oil market was valued at USD 237.13 million in 2022 and is expected to reach USD 430.07 million with a CAGR of 6.2% during the forecast period.
  • The rising product expansion among Ayurveda specialists due to its different benefits and increasing awareness about its anti-inflammatory, analgesic properties, and anti-rheumatic is driving the market growth.
  • The surging prevalence and popularity of agarwood oil as a luxury fragrance, owing to its unique fragrance coupled with rising consumer demand for luxury and unforgettable experiences, is propelling the market growth.
  • Increasing R&D initiatives towards examining various medicinal properties of agarwood are further anticipated to boost the market expansion.

Geographical Spread and Key Takeaways

Based on geography, Asia Pacific region held the largest agarwood oil market share in 2022 owing to the presence of leading manufacturers of agarwood oil in countries including India, Sri Lanka, Indonesia, and Malaysia. Also, an increase in demand for cosmetic & personal care products, particularly among the population, is expected to boost the agarwood oil market demand in the region. E-commerce segment is predicted to account for the largest market share during the forecast period owing to the convenience & ease of shopping, increased product awareness, and global reach and accessibility to the product.


The agarwood oil market is expected to grow at exponential growth in the upcoming years, driven by its numerous benefits. Its captivating aroma has inspired researchers to delve deeper into its potential advantages and properties. Agarwood oil’s ability to treat diseases like stress and anxiety reflects the natural therapeutic potential of the substance.

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By Ankita Padiyar

Ankita Padiyar likes to play with words! She has been working in the content industry, with expertise in SEO content, social media content, website content, blogs, and articles for over 5 years. In addition to content writing, Ankita is a content publisher too, with hands-on experience with different CMSs. She works closely with B2B and B2C companies delivering engaging content that converts viewers into customers. She believes in "Dream Big" and thrives to achieve those dreams. When she isn’t writing, you can find her spending quality time with her 2-year toddler. Also, in her free time, she loves to explore new places. Don’t miss connecting with her on LinkedIn for networking!