Oil cooled type of reactors can be made suitable for indoor or outdoor use at all levels of system voltage.

Internally the construction consists of a core-less paper-insulated disk winding or layer type winding.

To prevent the stray flux from passing into the steel enclosure two different methods of construction are employed in oil cooled reactors. The first consists of laminated core-plate about the winding to contain the flux (Magnetic shielding) and the second prevents the flux from entering the enclosure by providing a non-magnetic screen of aluminium surrounding the winding (Non-Magnetic shielding).

Non-Magnetically Shielded Reactors have fully linear V/ I characteristics whereas Magnetically Shielded Reactors have linear characteristic upto 150% of the rated current.

Oil-immersed reactors are available in two design configurations : coreless and iron-core (either naturally cooled or force cooled).