In this paper, Ag@Al2O3 nanoparticles (NPs) were prepared through the atomic layer deposition (ALD) technique with Al2O3 nano-layers serving as anti-corrosion encapsulants. Then, the core-shell structured nano-composites were dispersed into Therminol 66 (TH66) to form oil-based plasmonic nanofluids with mass concentrations varied from 0 to 0.04 wt%. The suspension stability, optical absorption properties and photo-thermal conversion performance of oil-based nanofluids were experimentally tested and evaluated. Besides, the finite difference time domain method was used to simulate the optical absorption of Ag@Al2O3 NPs with different core-shell sizes and volume concentrations. Results demonstrated that the optical absorption capability of oil-based plasmonic nanofluids was enhanced with increasing the nanomaterial concentration. At the approximate optimum concentration of 0.04 wt%, the temperature of plasmonic nanofluid could be increased up to 90.5 °C after an irradiation time of 45 min at the solar intensity of 920 W/m2. The deposition of Al2O3 layer can enhance the optical absorption by intensifying and broadening the absorbance spectras of Ag NPs accompanied by red-shift due to the localized surface plasmon resonance (LSPR) effect. This study provides a promising option to produce plasmonic Ag@Al2O3 nano-composites at large scale for applications in solar thermal energy harvesting.