While raw agarwood of high quality is often burned as whole chips for its fragrance, lesser quality wood is generally reserved for oil extraction. Oil extraction techniques are considered proprietary and often closely guarded by the various manufacturers, primarily because proper techniques can substantially increase both quality and yield. One litre of agarwood oil requires about 144 kg of wild-source chips to produce, making the oil a very expensive product (Lim et al. 2022). Some extraction techniques and the use of plantation stock require even more wood. For example, in Cambodia, producing a litre of oil requires 1 000 kg of young plantation wood of A. crassna (Sinly et al. 2022).
Oil extraction usually involves one of three main methods: hydro-distillation, steam distillation,
or supercritical carbon dioxide extraction. All the processes use dried chipped wood that is ground into a pulp and boiled in a still. Hydro-distillation is the oldest and most labour-intensive method of the three and involves soaking the wood, boiling it in water and removing the oil from the water surface. Yields can be as low as 0.1%. Pressurized steam is faster but risks scorching the wood and may also produce substances that can reduce the quality of the final product. The use of carbon dioxide as a solvent is uncommon. While it has the potential
to produce higher yields, the process can also result in the extraction of derivatives that can impact on quality. Other techniques are currently being studied to produce higher yields and improve the quality of the oil, including solid liquid extraction, microwave-assisted extraction, spinning band distillation, ultrasonic assisted steam distillation, supercritical fluid extraction, and ultrasonic assisted hydro-distillation (Lim et al. 2022).
Once the oil has been extracted, the remaining wood still retains some aromatic qualities, and is generally reduced to powder (exhausted powder) for use in incense or bakhoor (scented bricks ). The powder can also be pressed into small statues, often of religious significance. Lower grades of wood may also be carved into objects like sculptures and beads that retain their aromatic qualities for years, although it appears that most of the beads in circulation are of other woods soaked in agarwood oil (UNODC 2016).