Is it okay to use wool oil (lanolin) and is it considered animal cruelty?
No, it is not animal cruelty. Sheep's wool will keep on growing whether or not it is sheared.
By shearing, the animal is also free from carrying the burden of excess weigh.
Shearing is a painless procedure; like cutting one's hair.
It is unlike the plucking of 'down feathers' whereby the feathers are forcefully ripped off from the ducks in a senseless manner.