Explosive potions are found on tables in the Castle Wars equipment rooms. They can be used to instantly destroy barricades or destroy the enemy catapult. It can also be used to clear or collapse the cave walls in the underground tunnel connecting the two castles. This is a useful strategy that many players employ, since dropping the rockslide on another player instantly kills them. These potions can't be taken outside of the Castle Wars area. If a player drops an explosive potion, it will cause damage based on your maximum hitpoints.
It is recommended that the flag runner takes a few of these as it is common for the opposing team to barricade the flag room. When the flag runner gets the opposing team's flag, they are useful to halt pursuers temporarily by collapsing the rocks in the underground tunnels.