Oud comes from the Argawood tree, the tree forms a resin which is where the potent scent comes from, the resin forms when the tree gets infected the reaction produces the dark luxurious liquid. It is common that wood chips from the tree are burned as incense for ceremonies and celebrations.
As the resin is only formed when the Argawood tree is infected, it makes the ingredient very rare which also increases the price of both the resin as well as the chips. Only 2% of these trees actually produce this.
To create the Oud oil from the resin it either needs to be melted or it can be extracted by distillation. A 3ml bottle of this can set you back an amazing £250. The value is often estimated as one and a half times the value of gold. Due to the difficulty harvesting, rarity and high demand this is easily one of the most expensive oils in the world, commonly known as liquid gold.