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In cold start driving cycles, high viscosity of the lubrication oil (engine oil) increases the mechanical friction losses compared with warmed up condition. Thus, an engine oil warm up system can provide the opportunity to reduce the mechanical friction losses during cold start. In this study, an engine oil heater using EGR is used for the fast warm up of the engine oil. This paper presents the effect of the engine oil heater on the fuel economy and emissions over a driving cycle (NEDC). A numerical model is developed to simulate the thermal response of the powertrain using multi-domain 1-D commercial powertrain simulation software (GT-Suite) and it is calibrated using test data from a full size sedan equipped with a 2.0L diesel engine. The model consists of an engine model, coolant circuit model, oil circuit model, engine cooling model, friction model, and ECU model.