Air compressor oil and water separators are designed to remove lubricants (or oil) from condensation within your system (water). The oil/water separators are normally installed downstream of the compressor tanks. In a compressor, the condensation within the lines becomes contaminated by the oil. The water condensation needs to be dispensed into the sewage system without oil present. An air compressor water or oil separator is needed to separate the two materials. Without the risk of contamination, the condensation needs to be removed without risk.