I have used this laser measure successfully for several projects, but not for measuring oil. It relies on detecting the spot where the laser beam hits the object. If you tried to measure the distance to a mirror you would not get the right reading unless the mirror was very dirty, so that a spot formed on the dirt. Depending upon the angle of a mirror, the laser beam might reflect onto a wall, and you would get a measure of the total path from laser to mirror to wall.
Liquids like oil present even more problems. If the oil is murky, like used crankcase oil, you might get a usable spot on the surface. Otherwise a clear liquid would bend the beam by refraction and make a spot on the bottom of the tank, and also one by reflection, like that of the mirror.
You best bet for measuring oil level would be to float something on the top of the oil. Then the position could be measured accurately.