I prefer direct deep inhalation of an essential oil over diffusion, especially if therapeutically targeting the lungs. Straight from the bottle, chin height take 4-8 rounds of breath, full deep inhalations followed by a relaxed exhalation. Add a couple of drops to hot water for a steam inhalation for any dry conditions.
Pro tip : Parents, avoid eucalyptus with children and babies unless under specific guidance; I use a far safer alternative for kids Lemon essential oil for respiratory ailments and air purification. Diffuse at low dilution in a neutral living space.
As with any medicinal botanical application best to consult with your health care professional before use.