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Classic French Onion Soup recipes call for sauteing the onions in butter, however there are many recipes that use olive oil instead. In short, yes, olive oil can be used as a healthier substitute for butter.
Olive oil can flavor the dish it is used in. If olive oil is used for saute in French Onion Soup, don't use an extra-virgin olive oil as it will have the strongest flavor. Instead choose a light olive oil.