This study investigates the energy transfer characteristics of arc discharge in transformer oil under power frequency AC voltage, focusing on bubble dynamic evolution and pressure wave propagation. An experimental platform with a high-speed schlieren system, voltage-current measurement module, and spectrometer was built. Breakdown experiments were conducted at pin-pin electrode gaps of 1, 2, and 3 mm to observe bubble development and pressure wave properties. The results show that bubbles undergo multiple expansion-contraction pulsations during discharge; their diameter and velocity increase with gap size, with a maximum velocity of 165.39 m/s. Pressure wave velocity ranges from 1.22 km/s to 1.37 km/s and also rises with gap size, reflecting the nonlinear correlation between bubble dynamics and oil gap dimensions. This study establishes the energy transfer path of arc discharge in oil and reveals the coupling mechanism between bubble evolution and pressure wave propagation, providing a theoretical basis for insulation fault diagnosis and protection of transformers.