Lighting, heat.
The oil and the water together burn bright white. The steel plate has to be hot enough to explode the water into steam and it combines with the oil to make a kind of fuel gas before burning. Once you get the oil/water drip burning it provides enough heat to the steel to keep itself going (usually).

(it burns about two units water to one unit oil fed as a steady drip)


You might want to do it if you had a supply of oil but not much wood or other fuel, but it is such a PITA to set up and regulate that I would just use a wick in the oil instead.