Direct contact liquid cooling has demonstrated superior cooling capacity and heat exchange efficiency in battery thermal management when compared to alternative methods. This article presents the design of a battery thermal management system (BTMS) utilizing dynamic circulating transformer oil as an immersion cooling medium. This oil-immersed BTMS is examined for its cooling performance across different flow rates, ranging from 30 to 600 ml/min, with an analysis of heat transfer characteristics during dynamic cycles. The findings reveal that transformer oil can significantly reduce the temperature of the battery module under circulating flow conditions. Even at the lowest flow rate of 30 ml/min, the maximum temperature of the battery module remains below 45 °C. However, beyond a flow rate of 200 ml/min, specifically in the range of 300–600 ml/min, the temperature drop in the battery module becomes less noticeable. Theoretical analysis indicates that at 200 ml/min (Re = 44.1), the dynamic circulation cooling system achieves its best cooling efficiency. These results underscore the effectiveness of the oil-immersed BTMS as an efficient thermal management solution for cylindrical battery modules, supported by both experimental and theoretical perspectives.