The most common and most likely answer to this crossword clue is the 7 letter word SOYBEAN
I've seen this crossword clue in The Guardian
S
O
Y
B
E
A
N
More clues leading to the result SOYBEAN
Buddy explains!

The straight part
We know that "oil producer" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case oil producer = soybean.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 SOYBEAN mean?
SOYBEAN noun- A legume plant (Glycine max), commonly cultivated for human and animal consumption and as a nitrogen-fixing ground cover.
- The edible seed of this plant.