Its essence is one of many ingredients (and also the last ingredient which was acquired) to perform the First Blade locating spell.
After gathering information from demons about the Knights of Hell and the First Blade, Tara attempted to seek the weapon. After years of fruitless searching, she was only able to find a tracking spell and gathered all but one of the ingredients, essence of Kraken. When Dean and Crowley arrived, Crowley was able to get the final ingredient from his own warehouse in Belize so they could perform the spell to locate the blade. However, the spell actually tracked the source of the Blade's power, which was the Mark of Cain, as the Blade itself was thrown into the ocean (later, it's known that the blade was thrown into the Mariana Trench).