Popular Uses of Cedarwood Essential Oil. 1  Diffuse after a stressful day to relax the mind and body. 2  Use with a carrier oil in massage therapy. 3  Add 1–2 drops to facial toner or moisturizer for added clarifying properties. 4  Inhale directly or diffuse to promote healthy respiratory function.opular Uses of Cedarwood Essential Oil. 1  Diffuse after a stressful day to relax the mind and body. 2  Use with a carrier oil in massage therapy. 3  Add 1–2 drops to facial toner or moisturizer for added clarifying properties. 4  Inhale directly or diffuse to promote healthy respiratory function.