You can also get tempers like Dwarven Oil from refining raw materials, I believe.
I have also read that the more points you have in the first smithing skill of the skill tree, the higher the chance of receiving better tempers from hirelings. Not 100% sure if that is true though.
I have never found any dwarven oils from searching caves and stuff. The best ways seems to just deconstruct blue items. If you check a few guild traders, you may be able to pick
...And, yes, you will never find Dwarven Oil by Farming, other than refining the raw mats you Farm. Or, deconning Blue items can return some oil. Or, Hirelings. Those are your three sources.
Well, you can buy them in the Guild Kiosks too...
FYI
There is another source not mentioned. You can also obtain upgrade mats including dwarven oil from fishing via the Wet Gunney Sacks. While making a video on ESO fishing for my blog, I collected around 20 Wet Gunney Sacks to provide some info on what you can find in them. While opening them, I received several green and blue upgrade mats (including dwarven oil). I have heard "Wet Gunney Sacks" called the fishing equivalent of Heavy Bags. Perhaps you can also get Dwarven oil from them as well but I do not recall finding any myself.
Forget guild traders. 1500 a piece is joke. Get the blacksmith passives. Hireling and metal extraction. Break down blue stuff, mine loads of ore and refine it. I got 100+ in the bank and i''ve made at least 6 sets of blue armor.
Get the temper expertise passive so you require less dwarves oil to improve items.