As a byproduct of a necessary process for energy applications, mineral oil is an extremely cheap additive which of course gives it favor with formulators striving to increase profit margins on their products. It is not a toxic material and is considered to be an extremely safe and effective skin care and hair care ingredient. It has really gotten a bad rap on the internet and in certain marketing campaigns, but the empirical evidence and data simply do not support this.
Cosmetics grade mineral oil undergoes a rigorous purification process prior to being sold as a raw material and contains no residual dangerous components of the petroleum cracking process. The molecules of which it is composed are inert, non-toxic, and nonreactive, which makes them safe for use in external applications. (There are some risks associated with internal consumption of mineral oil, because it can block nutrient absorption.)
Mineral Oil for Hair
Mineral oil is a good lubricant, and thus performs well as a detangler. It deposits onto the surface of hair strands and forms films that are sufficiently thick to mask irregularities in the cuticle structure, which gives it fantastic smoothing and emollient properties. It significantly decreases wet combing forces and can help prevent breakage. The film formed by mineral oil on hair is occlusive, meaning it prevents the passage of water through it in either direction. Thus, it acts as a protective barrier that aids in moisture retention by preventing the diffusion of water from the interior of the hair out into the environment in dry conditions, and it also helps to minimize frizz by preventing penetration of moisture into the hair in humid conditions. It has also been found to minimize damage to hair caused by chemical relaxers, so it is often included in those products.
Mineral oil is effective at enhancing curl formation and curl clumping as well. It is able to do this because of the films it forms on the surface of hair fibers. The films exert capillary forces between adjacent hair strands, which causes them to be attracted to and stick to one another. This phenomenon is known as capillary adhesion. The capillary adhesion for mineral oil remains fairly constant over time, so if you can manage to not handle your hair very much, it can help with curl retention throughout the day.
Mineral oil is completely hydrophobic (water-hating), and for that reason needs to be washed with a surfactant-containing shampoo. It is easily removed though, and does not require harsh products. Something that contains mild surfactants such as sodium cocoyl isethionate or cocamidopropyl betaine should be completely fine. Another thing to be aware of is that dirt is often attracted to these simple organic oils, and so second or third day hair may begin to look a bit unkempt, depending upon your environment.
It is my opinion that mineral oil is not one of those materials that must be avoided at all costs. It provides some pretty decent benefits, and I would not personally discard a potential product simply because it was on the ingredients list. It looks as if it is especially useful if you live in very dry or very damp climates or if you use chemical relaxers of any sort. It certainly may not deliver the same level of performance as some vegetable oils or even some of the synthetic polymer emollients, but it certainly can be adequate.
J Cosmet Sci. 2007 Mar-Apr;58(2):135-45. Effect of oil films on moisture vapor absorption on human hair. Keis K, Huemmer CL, Kamath YK.TRI/Princeton, Box 625, Princeton, NJ 08542, USA.
J Cosmet Sci. 2003 Mar-Apr;54(2):175-92.Effect of mineral oil, sunflower oil, and coconut oil on prevention of hair damage. Rele AS, Mohile RB.Research and Development Department, Nature Care Division, Marico