There are three kinds of holy oil in the Catholic Church:
1) Oil of the Sick (“Oleum Infirmorum”)
2) Oil of Catechumens “Oleum Catechumenorum”)
3) Sacred Chrism (“Sanctum Chrisma”)
These three are often identified by their initials, respectively:
2) OC (sometimes “OS”)
We learn from Tertullian (Ad Scapulum, 4) that there were only two sacred oils in the late second century: sacred chrism (oil mixed with balsam) that was solemnly blessed by a bishop and plain oil that was blessed with less solemnity. The former was used in baptism/confirmation and the latter was used for catechumens and the sick.
The Oil of the Sick was prescribed by Saint James for use by the Church’s presbyters (the English word priest derives from the Greek presbyteros) in James 5:14.
The Oil of the Catechumens was originally used for exorcisms as it denoted the presence of the Holy Spirit. Since Catechumens (that is, those seeking baptism) were often possessed or afflicted by demons, they received anointings prior to their baptism. Thus, oil of the catechumens.
The Sacred Chrism is very ancient and likely apostolic in origin. Today the Catholic Church uses sacred chrism in the post-baptismal anointing for infants, in Confirmation, for Holy Orders, the consecration of churches, altars, and even bells. In Holy Orders, the bishop is anointing on the head and priest are anointed on the hands.
I have also discussed the significance of Sacred Chrism elsewhere.
Canon 7 of the Second Ecumenical Council, that of Constantinople held in 381, mentions the importance of sacred chrism.
Saint Thomas Aquinas taught that sacred chrism (blessed oil mixed with balsam) was instituted immediately by Christ (Summa theologiae IIIa, 72, a. 4).
Pope Eugene IV declared in his bull Exultate Deo that chrism of the “matter” of the Sacrament of Confirmation and this was reaffirmed by the Council of Trent (Session 7).