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These insulation scenarios for hot-oil applications use bare 2" pipe, and pipe sizes from 2" to 20" with an insulation layer sized to keep outer insulation temperatures below 140ºF.
When used in certain locations, porous insulation allows leaking thermal fluid to spread out inside the hot, enclosed space, coating the insulation. If a limited amount of air leaks in, the decomposing fluid will begin to smolder, creating a facility and personnel risk.
Depending on the pressure and temperature of the thermal fluid, water can expand up to 1,100 times its initial volume when it converts to steam. No matter how it gets in your thermal fluid heater, it's your job to get it out.