Oil appears on some levels. You need to make matches or explode power-ups next to it to collect it. If you don’t clear the oil off tiles, it’ll spill further with each move, blocking one tile after another.
Barrels of oil leak oil onto the field, and you can’t destroy or move them.
Jerricans with oil, once destroyed, leave the tile under them and four neighboring tiles blocked by oil. You can swap them with regular pieces when making matches.