Oud oil, also known as agarwood oil, is derived from a type of Aquilaria tree that is native to Southeast Asia. The tree produces a dark, resinous heartwood when it becomes infected with a specific type of mould. This infected wood, or “oud,” is highly sought after for its unique, complex aroma, which can include notes of dark fruit, spice, and smoke.

One of the main reasons that oud oil is so expensive is because of the scarcity of high-quality, infected Aquilaria trees. The trees are becoming rare due to overharvesting, deforestation, and habitat loss. The process of producing oud oil is also time-consuming and labour-intensive. It can take several years, or even decades, for the infection that produces the oud to develop within the tree, and the resin must be carefully harvested by hand.

Another reason why agarwood oil is expensive is that it is a luxury item that is highly valued in certain cultures, particularly in the Middle East, where it is used in perfumes, incense, and traditional medicine. High demand and the rarity of good quality wood which is necessary to produce good quality oil drive the price up.

The price of oud oil can vary widely depending on the quality and origin of the oil. The highest-grade oil, which is made from the most highly infected and fragrant wood, can fetch prices as high as thousands of dollars per ounce. Lower-grade oud oil is less expensive but still relatively costly.

In recent years, a number of sustainable and ethical oud producers have emerged, which are working to ensure that the trees are harvested in a responsible and sustainable manner, however price point for these oils is still high as they are considered niche products. And due to the fact that the process of producing agarwood oil is still time-consuming and labour-intensive, it will always be relatively expensive.

It is also worth noting that there are some oil being sold as oud that is not pure oud but is actually artificially created by mixing other substances to mimic the scent of real oil, thus being cheaper but also not having the same benefits and properties of real oud.

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