Citronella, cedarwood, lavender, peppermint, eucalyptus, and lemongrass, are common EOs used in natural/homemade fly sprays. They do tend to be pretty effective, but how effective depends on their carrier (needs to be an oil, both for staying power, and to hold the EOs), and the concentration. Even commercial synthetic chemical fly sprays that are water-based don’t last as long as those that are oil-based.
It also depends on what the native bugs have adapted to. They can definitely become immune to the effects of a given product if that’s used exclusively on a frequent enough basis (ie exclusive and multiple times a day, vs exclusive but just a few times a week)
As for their use with horses - IMHO any positive effect from most of them will come from olfactory sensory input. There is too much hair, and too thick skin, for most topical applications of any cost effectiveness to have any impact. The ones that will have the most impact are heating or otherwise tingle-inducing. And depending on what you believe and have experienced yourself with EOs on your own skin, most of them require regular use to have any appreciable impact, because they are not drugs, they do not have an immediate effect.
And even then, there is no guaranteed response to any EO, no matter how much you love or believe in them. I do use them, for myself. One thing I use them for is sleep assistance. For a long time I played around with different combinations that always included lavender (because that’s the long-touted sleep EO, right?) I used others like cedarwood. orange, chamomile, and some others. Adding cedarwood guaranteed worse sleep, borne out over trials of adding it and removing it and doing my best to wish it into being effective. But so many say with cedarwood they are out like a light. Not me.
However, when I REMOVED lavender, and added cedarwood back in, the difference was significant.
I’d never discount the ability of quality EOs to impact (good or bad) a horse who smells it. Olfactory senses are sharp and sensitive, but there are variances in every individual. Among our cats, there is one who can smell lavender or just-applied perfume on you a mile away and runs like she’s been stung. But another one could sniff the bottle and not blink twice (no, I don’t allow that, but she couldn’t care less about strong odors). Same with people, and same with horses.
And don’t negate the placebo effect Nothing wrong with that at all.