Practitioners of aromatherapy believe that fragrances in the oils stimulate nerves in the nose. Those nerves send impulses to the part of the brain that controls memory and emotion. Depending on the type of oil, the result on the body may be calming or stimulating.
The oils are thought to interact with the body's hormones and enzymes to cause changes in blood pressure, pulse, and other body functions. Another theory suggests that the fragrance of certain oils may stimulate the body to produce pain-fighting substances.
http://www.webmd.com/balance/stress-management/tc/aromatherapy-essential-oils-therapy-topic-overview