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Copperclaw's Volatile Oil is a quest item given and used for the following quests:
When combined with an Abandoned Helm, Abandoned Armor, and a Pile of Bones, all found at the Broken Front, Copperclaw's volatile Oil creates a dummy. The dummy attracts a frost wyrm that attempts to snatch the dummy up. The dummy explodes, destroying the frost wyrm.
Note that the three additional components stack, so you can gather them all, then set off the three required dummies in quick succession.
The alliance acquire a sample of this oil (Smuggled Solution) and put it to the same use in the quests