The most common and most likely answer to this crossword clue is the 7 letter word CAMPHOR
I've seen this crossword clue in Independent
C
A
M
P
H
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Buddy explains!

The straight part
We know that "Essential oil" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case essential oil = camphor.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does CAMPHOR mean?
CAMPHOR noun- A white transparent waxy crystalline isoprenoid ketone, 1,7,7-trimethylbicyclo[2.2.1]heptan-2-one, with a strong pungent odour, used in pharmacy.