Essential oil is insoluble in water, and pure essential oils will disperse into particles when dropped into water, and impure oil will become floating oil. Although essential oil is called oil, good essential oil should not feel greasy when applied to the skin. You can apply it to your skin and stick it with a paper towel. If there is oil stain on the paper towel, it means it has been diluted with base oil. There are also essential oils that will not leave oil stains after being dried on paper towels.