Oily is the Status Effect of where you are.. oily. Being oily you are at a disadvantage in limited circumstances, however those circumstances can be very bad.. namely.. Fire. You, like Oil, are now very flammable. Thus, while Oily, Fire based attacks do double damage and can cause Burnt.
Other than using Heal Orbs to clean yourself, the only other way to stop being Oily is to use Cleanser to remove the Oily effects off of you.
As a Status Effect, this one can be potentially fatal. It depends on the the enemies and bosses you are facing. Burnt will make it even worse, and some bossse do use Fire Attacks, and for potentially devasating damage as you get higher and higher into the game. Your HP, defense, and the zone you are in it(bosses you will face) are the main things to consider when deciding if you need to fix this.
The following locations, enemies, and bosses can cause you to become Oily.
- Orc Camp: Crow Mountain Tunnel(#2 on the map)
- Cursed Forest: Alchemist(Enemy)
- Mage Tower: Stairway of Trials(#2 on the map), Alchemist(Enemy)
- Flaming Volcano: Erupting Crust(#2 on the map), Volcano Cave(#11), Emo Slime(Enemy), Imp(Enemy)
- Canyon of Immortality: Red Bird Forest(#6 on the map), Kirin(Enemy), Clouse(Enemy)
- Dragon Archipelago: Dragon Triangle(#2 on the map), Underwater Ruins(#6), Mutated Crystals(#16), Wyvern(Enemy)
- Hellgate: Tunnel of Exile(#2 on the map)
- Skyland: Angel Path(#1 on the map), Floating Rock#12), Clouse
- Pandemonium: The End Road(#14 on the map)