To improve the existing method to detect the product oil in pipeline sequence transportation, it is necessary to set a new method for product oil identification and detection based on the characteristics that reflect the quality of oil. This paper researches a optical sensor and a new method for product oil identification and mixed oil distinguish and calculates the light intensity of the Fresnel reflection occurred at the interface between the product oil and a measuring probe. The product oil and oil mixtures are analyzed by using the principle of energy conservation and the inductor model of an electron cloud . Using the optical sensor, the product oils can be identified exactly, and different oil mixtures can be distinguished from each other successfully in a relative error less than 0.02%. The experimental results provide a theoretical basis for the identification of product oil,which shows that the proposed optical sensor has a great application prospect in analyzing the compositions of oil mixtures and predicting the mixing and diffusing conditions of oil transported in product pipelines.