Eucalyptus oil is made from the leaves of the eucalyptus tree. When extracted and diluted, it may disinfect wounds, heal cold sores, and even control blood sugar. Eucalyptus oil is used to relieve coughing. It may be applied to the chest and throat to relieve cough symptoms from the common cold or flu. Respiratory conditions such as asthma and sinusitis may be helped by inhaling steam with added eucalyptus oil. The oil reacts with mucous membranes, not only reducing mucus but helping loosen it so that you can cough it up. It’s also possible that eucalyptus blocks asthma symptoms. On the other hand, for people who are allergic to eucalyptus, it may worsen their asthma. It can also be used as a bug and mosquito repellant.