Oil, e.g. is a term that can refer to a variety of substances. Two of the most common are lubricants and lipids. Lubricants are substances that reduce friction between two surfaces, such as oil in an engine. Lipids are a group of organic compounds that are insoluble in water but soluble in nonpolar solvents, such as fats, waxes, and oils. Both lubricants and lipids are important components of many products and processes.