Blood Oil is a harvestable Raw Material abundantly found in the Blood Kelp Zone and Blood Kelp Caves areas.
Sacs of Blood Oil can be found attached to the lower part of Bloodvine stems or on Bloodroots. The PDA description, found on the Bloodvine page, notes that it is an oily goo.
It can be picked up by hand and be used for crafting or farming in order to grow Bloodvines.
Uses in Crafting
Blood Oil on the stem of a Bloodvine