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Oud also know as Agarwood or Aloes wood is formed in a tropical evergreen tree called Agar tree (Aquilaria species). When this tree is infected infected by certain fungi, the tree will respond by creating a dark, fragrant resin. Once this resin hardens, this creates oud, which can then be harvested.
Oud is one of the most expensive raw materials used in modern perfumery. The reason why it is so expensive is because of its scarcity. With wild oud on the border of extinction, Agarwood plantations are the next best option for a sustainable oud.
A lot of people believe oud comes from the Middle East because of its popularity there but in fact it's sourced in Southeast Asia.
Oud is sold in many forms from its purest (wood chips and pieces), to an oil (both pure and blended together with other fragrances). Even its derivative products which are usually small pieces of oud leftover after distillation – oud moattar and its dust dakhoon or bakhoor is used as incense either alone or combined with other fragrant ingredients.