From the Super Mario Wiki
Oil is an enemy in the game Donkey Kong on the Game Boy. It appears in stage 1-1 in the Big-City for the first time, which is after stage 0. The enemy only consists of an aura of fire with the text "oil" written on it. It floats up and down in place without trying to attack Mario, but touching it is deadly. It can be defeated with the hammer.
Oil reappears in Mario vs. Donkey Kong and behaves the same way. This time, its lower body is confined in an Oil Drum.
- ^ Game Boy Donkey Kong English instruction booklet, page 21