The invention provides a herbal oil formulation used as an anti-rheumatic, analgesic and cold alleviating formulation for topical use. The herbal oil formulation comprises a therapeutically effective combination of extracts obtained from the plants of Mentha Piperata , Thymus Vulgare, Cinnamomum camphora, Eugenia Aromatica, Cinnamomum cassia, Eucalyptus Globulus, Vitex Nigundo, Celastrus paniculatus, Olea europaea, and optionally Brassica Nigra and Trachyspermum ammi. The invention further describes methods of making the herbal oil formulation which is free from any additional preservatives, colorants and is devoid of flame heat application.