This note describes the test method for the quantitative analysis of aerosol oil and liquid oil typically present in the air discharged from compressors and compressed air systems. The method is rapid, sensitive and cost effective and shows the FT-IR can be an effective tool for the monitoring of oil content. The methodology followed for the analysis by FT-IR is reported in Bureau of Indian Standard and we have also tested for its ruggedness, spike recovery, linearity and detection limits.