I've got some basic knowledge of 2-stroke engines and my understanding through research and empirical knowledge is:
Oil reduces octane rating: fuel is formulated to a specification that gives the required octane number - adding non volitiles reduces octane so run the highest octane pump fuel. The more oil you add to the fuel, the higher the octane rating you require to compensate for the octane reducing effect of the oil.
Octane rating: The octane rating is the measurement of the fuels resistance to detonation. The higher the octane rating the slower the rate of burn but the cylinder pressure is more even and consistant throughout the power stroke.
Higher octane fuels generate more low and midrange torque and allow more spark advance and greater cylinder pressure without detonation - perfect for making more power and torque at a lower rpm - exactly what we need with our Chinese engines.
Oil and Fuel Ratio and it's effect on power: The more oil added to fuel of a specific octane rating, the more the octane level is reduced. This requires a higher octane rating to compensate.
The more oil is added the greater the contained cylinder pressure becomes because oil quantity in a poorly manufactured 2-stroke engine (like our Chinese engine kits) is used to create a fluid seal (hydro dynamic seal) between the rings and the cylinder bore - THIS IS A VERY IMPORTANT POINT TO UNDERSTAND.
With these Chinese engines the best balance between oil and fuel quantity and fuel octane and power is 20:1
Running above 20:1 may make more theoretical power but it doesn't because the hydro dynamic seal is reduced and the greater the effect of blowby past the piston rings, contaminating the fresh cylinder charge underneath the piston.
Heat extraction: excess heat through various hot spots on the engine are kept under control through the process of oil absorbing heat and preventing excessive distrotion of the metalic parts.
Running abouve 20:1, eg, 25:1, 30:1, 40:1 will lead to piston skirt scuffing and evential engine piston siezure if used at wide open throttle for long periods of time even with normal rpm levels - i could go into the bennefits of castor oil, but that's another topic.
The needle roller bearings are very tollerant of low oil levels - what destroys needle roller bearings in 2-stroke engines is excessive rpm and flat spotting the needle rollers which then vibrate the daylights of the retainer cage and subsequently fall out of the cage, destroying the engine.
