When caustic soda (sodium hydroxide, NaOH) is mixed with oil, a soap is formed. This process is called saponification.

Here's what happens:

* Caustic soda is a strong base, and oil is a triglyceride, which is a type of fat.

* When they are mixed, the hydroxide ions (OH-) from the caustic soda react with the ester bonds in the triglycerides.

* This reaction breaks down the triglycerides into glycerol and fatty acid salts.

* The fatty acid salts are what we know as soap.

It's important to note that this reaction is highly exothermic (releases heat) and requires careful handling. You also need to use the right type of oil (vegetable oils work best).

Here's a simplified chemical equation:

Triglyceride + 3 NaOH → Glycerol + 3 Soap

Let me know if you'd like to learn more about saponification or soap making!