The disadvantages of the conventional cutting fluids such as mineral oil have prompted the search for eco-friendly cutting fluids. Vegetable oils have often been recommended as environmentally friendly substitutes for traditional mineral oil. The current study examined the performance of palm kernel oil (PKO) and its mineral oil during the turning of AISI 304 steel using the minimum quantity lubrication (MQL) technique. Six litres of crude PKO were extracted from palm kernel seeds through a mechanical extraction technique. Taguchi L9 (3)3 orthogonal array was considered for the experiment. The depth of cut (DC), feed rate (FR), and spindle speed (SS) are the cutting parameters while cutting temperature (CT) and surface roughness (SR) are the response characteristics. Experimental results showed that the mineral oil outperformed the PKO in terms of SR with an improvement of 48.2%. The improvement of PKO over mineral oil is approximately 0.89% in terms of cutting temperature. The highest turning temperature of mineral oil was 67.333 °C, while that of PKO was 67.8 °C. In general, the performance of PKO shows it can be a good replacement for mineral oil if produced industrially with adequate additives. The grey relational analysis (GRA) showed that the optimum DC, FR, and SS for palm kernel and mineral oils are 1.25 mm, 0.25 mm rev−1 and 870 rev min−1, and 1.25 mm, 0.10 mm rev−1, and 870 rev min−1, respectively. The results of this study demonstrated an experimental basis for the application of PKO minimal quantity lubrication turning and validated the efficacy of the integrated Taguchi-grey relational analysis (TGRA) optimization approach.