Yes, it is safe to add oil to y our horse's diet and it provides more than twice the digestible energy for the body to use than protein. Horses can handle up to 20% fat in their diet a day. Oil doesn't lead to the jump in blood sugar or the increased risk of gastric ulcers or colic that grain based concentrate feeds do either.
For an average sized horse, you can add 1-2 cups of oil per day. You can use any number of types of oil--flax, canola, sunflower seed, corn, etc. For horses with inflammatory issues such as arthritis or allergies, you want to choose an oil that is lower in Omega 3 fatty acids as these feed into the inflammatory cycle so choose flax or canola oil for these horses. http://www.thehorse.com/ViewArticle.aspx?ID=3895 http://www.thehorse.com/ViewArticle.aspx?ID=10848