The Rishonim (Medieval Halachic authorities) debate the issue of whether wax candles are suitable for the Mitzva of lighting candles on Friday night. Rashi, the Behag, Tosefot, Rabbenu Yona, the Rosh and the Tur allow using wax candles, whereas the Geonim, the scholars of Narbonne, the Rif and the Ramban held that one does not fulfill this obligation with wax candles. The Shulchan Aruch (264:7) sides with the lenient view, and thus according to the final Halacha one may use wax candles for the Mitzva of Shabbat candle lighting.
Nevertheless, the later authorities established a hierarchy of preference with regard to the Shabbat candles, and ruled that ideally one should light the candles with olive oil (Shulchan Aruch 264:6). The next level of preference is the use of other oils, and only as a third preference should one use wax candles. However, Chacham Bentzion Abba Shaul (Jerusalem, 1924-1998) in Or L’Tzion, Helek 2, Perek 47:5, claimed that the paraffin candles widely used today are of such a high quality, and produce such a steady and clear flame, that they are now on a higher level of preference of oils. Therefore, if one cannot use olive oil for Shabbat candles, he should use parafiin candles over other oils.
The Gemara establishes in Masechet Shabbat (2A) that one may not use for Shabbat candle lighting a type of oil called "Shemen Keek," since it does not produce a steady flame. According to one view in the Gemara, "Shemen Keek" refers to oil produced from cottonseeds, and on this basis the Shulchan Aruch rules that one may not use cottonseed oil for lighting the Shabbat candles (S"A 264:3). Nevertheless, Chacham Bentzion Abba Shaul in Or L’tzion Helek 2 Perek 18:15, ruled that since the cottonseed oil manufactured today undergoes a thorough process of refinement and it indeed produces a clear and steady flame, one may use cottonseed oil for Shabbat candles, provided that he adds at least a small amount of another kind of oil. Chacham Ovadia Yosef in Yabia Omer, Helek 9, page 254, extended this leniency even further, claiming that one may use cottonseed oil as a second preference to olive oil even without adding other oil, since the cottonseed oil produced today has the same status as other oils, given that it produces the same quality flame.
In conclusion, it should be noted that the Chid"a (Rabbi Chayim Yosef David Azulai, Israel, 1724-1806) emphasized the importance of properly observing the laws of Shabbat candle lighting, and particularly of using specifically olive oil, which is the preferred means of lighting. Through the proper observance of these laws, he writes, a person is rewarded with children who "shine" in Torah scholarship, and it therefore behooves us to exercise particular care with regard to the Mitzva of Shabbat candles. (Kaf Hachayim, siman 264, s"K 38.)
Summary: Shabbat candles should preferably be lit with olive oil; if one cannot use olive oil, he may use any other kind of oil – including cottonseed oil but preferably the standard paraffin candles.
