Why Does the Water from My Water Heater Smell Like Oil?

By Sandy Hess

October 11, 2025

You probably use your home's water supply in various ways as part of your daily routine. But if the water gives off an oily odor when you take a shower, wash dishes or do laundry, you may have a serious water heater issue.

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What Are Some Reasons the Water From My Water Heater Smells Like Oil?

Your water might have a sulfur or oily smell for several reasons.

1. Bacterial Growth in Water Heater

A bacterial reaction in the water heater is one of the most common sources of oily odors in hot water. This occurs when certain bacteria react with minerals in your water heater or the unit’s anode rod, often made from aluminum or magnesium. This can give off a foul odor, such as oil, fuel or rotten eggs (sulfur).

2. Contaminants in the Water Supply

The source of your water's oily smell might not be your water heater. Instead, it could be contaminants in the water supply. This is more common in homes supplied by a well rather than a municipality. Accidental spills and underground fuel tank leaks can contaminate nearby water sources. If you can smell the oily odor in both your hot and cold water, it could be a sign of contaminants in the water supply.

3. Recent Plumbing Repairs or Water Heater Installation

If you’ve recently had plumbing work done or a new water heater installed, the odor from residual oils used during installation could linger for several days. Over time, these oils should flush out and go away. However, if the smelly hot water persists, contact your plumber to have it checked.

4. Wear and Tear on Water Heater Components

Older water heaters sometimes develop sludge or mineral deposits that give off an unusual odor, such as a hot water sulfur smell. If the inside of your tank is corroding or has sediment buildup, it can interact with the water to produce an oily smell.

Should I Drink This Water or Use It to Wash or Cook?

If your water has an oily odor, it may not be safe to use. You shouldn’t use this water for any type of cooking or drinking. It could be contaminated with dangerous bacteria that could pose serious health risks to you and your family. You should test the water before using it.

It’s also not recommended to use this water to do laundry. First, the oily odor could penetrate your clothes and leave a lingering smell. Second, depending on the issue, it could damage your washing machine, leading to costly repairs.

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Is It Common for a Water Heater to Have an Oily Odor?

No, your water heater shouldn't give off an oily smell. You definitely don't want to ignore this issue. Follow all the restrictions listed above and call in professionals as soon as possible.

How Can I Fix This Problem or Have It Repaired?

If your water heater smells like oil, immediate action is necessary. Follow the steps below to protect both you and your family.

Check the main water supply. The best way to test your main water supply is to run cold water only and determine if it still has an oily odor. If it does, it’s likely the water supply. If you have a well, contact your local health department to request testing. If your water is supplied by a local municipality, contact them as soon as possible to report the issue.
Inspect for visible signs. Check your water for any oily sheen or discoloration. If you see oil or residue, stop using the water immediately. Contact your local water municipality or health department.
Flush your water heater. If the issue is due to sediment buildup or bacterial contamination, try draining and flushing your water heater. This can sometimes remove this buildup and restore your water to normal.
Call a licensed plumber. If the water heater odor doesn’t go away, it’s time to call a licensed plumber or your water provider for further testing and repairs.

Protect Your Family by Calling in the Professionals

Water heater smells aren't normal and require immediate attention. Don’t take any chances. Call a local plumber to examine your unit and identify the source of the water heater smell.

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