The most common and most likely answer to this crossword clue is the 7 letter word ANILINE
I've seen this crossword clue in The Daily Telegraph
A
N
I
L
I
N
E
Buddy explains!
The straight part
We know that "Oily substance" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case oily substance = aniline.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does ANILINE mean?
ANILINE noun- The simplest aromatic amine, C6H5NH2, synthesized by the reduction of nitrobenzene; it is a colourless oily basic poisonous liquid used in the manufacture of dyes and pharmaceuticals.