Lemon oil is one of several essential oils that can kill harmful bacteria that can grow on your skin. Lemon oil can be diluted and applied directly to the skin or diffused into the air and inhaled. It is a common ingredient in various skin and aromatherapy products.It has long been used as a home remedy to clear the skin, to soothe anxiety, and to stimulate the mind. More recently, small medical studies have investigated the validity of these claims and discovered that lemon oil does offer several health benefits.