This is a result of the Volcano fireballs, from eruption, sometimes depending on how fast you render, you may not even see them flying, but can still be killed by them, standing on the east side of volcano seems to be unaffected, but anywhere else can be targeted, including the oil / water puddles.
It does approx 7,000 damage reduced by armor / saddles, but will 1 shot any player if taking a direct hit.