How to add JPG file to oft template at specific location in on email body

To give you a full working example:

Option Explicit

Sub test()
    Dim OutApp As Object
    Dim OutMail As Object
    Dim str_jpeg_file As String
    str_jpeg_file = "C:\Temp\test.png"
    Set OutApp = CreateObject("Outlook.Application")
    'Set OutMail = OutApp.CreateItemFromTemplate(ThisWorkbook.Path & "\Test.oft")
    'instead of a template I create a new mail
    Set OutMail = OutApp.CreateItem(0)
    With OutMail
        .To = "test@abcd.com"
        .CC = ""
        .BCC = ""
        .Subject = "Test mail"
        .SentOnBehalfOfName = "zyz@abcd"
        .Attachments.Add str_jpeg_file, 1, 0
        'first we write some placeholder text so we can replace it
        .HTMLBody = "lalala ##IMAGE_PLACEHOLDER## lala"

        'replace
        .HTMLBody = Replace(.HTMLBody, "##IMAGE_PLACEHOLDER##", "<img src=""cid:test.png""height=256 width=256>")
        '.Send
        .display
    End With
End Sub

Note that I used a new email (no template) because it is easier to show here.

And it works perfectly:

So if it doesn't work for you either your image file is no valid image or you did something else wrong like typos etc. or your template is somehow the issue. Check again with the code above.