Oiling the bat properly will make sure that the wood becomes supple and this means that when the knocking in process starts the face & edges of the bat will dent rather than crack.
All natural faced bats MUST be treated using raw linseed or a specialist cricket bat oil. The main purpose of oiling is to maintain moisture levels within the blade, and hence reduce the chances of cracking and splitting.
Raw linseed oil should be used to moisten the surface of the bat and enable the fibres to become supple and knit together, forming an elastic surface. This is more likely to stretch on impact, rather than crack. Raw linseed oil is used, as it stays moist for longer than boiled linseed. About a teaspoonful should be applied to the surface of the bat
The purpose of oiling your cricket bat is to help prevent the wood from drying out and becoming brittle, it also helps to soften and bind the surface fibres of the willow during the knocking in process. By oiling the toe you are helping to prevent water ingression that could lead to the toe cracking and the face peeling.