Sandalwood essential oil comes from the wood of the trees from the botanical family Santalaceae. The oil is distilled from the heartwood of trees that are at least 15 years old (Wikipedia).
Sandalwood was traditionally used as an incense during ritual work for enhancing meditation. The Egyptians also used sandalwood for embalming.
Sandalwood is very similar to frankincense in action. It may support the cardiovascular system and relieve symptoms associated with lumbago and the sciatic nerves. It may also be beneficial for acne, regenerating bone cartilage, catarrh, circulation (similar in action to frankincense), coughs, cystitis, depression, hiccups, lymphatic system, menstrual problems, nerves (similar in action to frankincense), nervous tension, increasing oxygen around the pineal and pituitary glands, skin infection and regeneration, and tuberculosis (Modern Essentials).
Sources:
http://en.wikipedia.org/wiki/Sandalwood
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