Magic Oil is a special oil the Moon Bear King had made to pollute the Moonshine Sea in order to stop the sea creatures from turning against him. Its also used as oil to fuel General Horse and Bull's Cars.


Once the Moon Bear King took over the Moon Realm he worried about possible threats from the Moonshine Sea. He had created a type of oil, the "Magic Oil" to fix this problem. He had General Pig and Sheep test the oil effects on the moonshine sea creatures aboard the Jolly Lambham and had them pollute the moonshine sea, which turned the sea wildlife into greedy evil creatures and zapped away all the God Of The Sea's powers and strength. The magic oil also turned the ocean partly black and purple.

However once Kutaro defeated the Kraken and got back the God of the seas trident! He used its power to clean the moonshine sea of the Magic Oil and cure its inhabitants. Kutaro eventually defeated General pig and sheep, stopping future spills of Magic Oil in the seas.

In the Wild Waste along Route Sixty-Sticks, magic oil can be found in fuel tanks, which  General Horse and Bull use to fuel there cars, the nasty result is that it creates Dark Exhaust, which harms the land.