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Extract. An extract is a mixture of an essential oil and a medium--usually alcohol--that helps carry the flavor. You can make peppermint oil either by soaking peppermint leaves and stems in alcohol and allowing the alcohol to absorb oil--extracting the flavor from the plant--or by diluting peppermint oil with alcohol.
Oils vs. Extracts. I have always used anise oil (not extract) to bake my holiday pizzelles and biscotti, but I'm having a harder time finding it each year. I found anise essence at a cooking store and was told it would be more potent than the oil because it's not diluted. What is the difference among flavoring oils, extracts and essences ?