When you refer to "Mustard Oil", I assume the first of the definitions on Wikipedia is applicable: "A fatty vegetable oil resulting from pressing the seeds". This, in my personal opinion, is food.
On the German Zoll's website you can find the following information regarding "The private import of food and animal feed":
"The import of food and animal feed for the consignee’s private use or consumption is permitted in principle."
Following this there is a list of exceptions and restricted goods, none of which should apply to your case.
So, in my personal opinion, as far as you are allowed to bring it on board your plane, you should be permitted to take it into Germany!
Edit: On a side note, any food consisting of plants not completely processed may also be subject to the regualtions on plants. Especially (primarily probably raw) potatoes are never to be imported into Germany from outside the EU! - But oil seems to be well out of this category.