The main difference between oil type and dry type transformers lies in their cooling and insulation methods:
Oil type transformers use insulating oil to cool and insulate their internal components. The oil circulates to dissipate heat and prevent electrical discharges.
Dry type transformers use air or other gases for cooling and insulation, without any liquid involved. They are typically safer in environments where fire risk is a concern and require less maintenance but may have lower cooling efficiency compared to oil type transformers.