Born at Kirkthorpe, Yorkshire, and was baptised on 27 December 1602 in the parish church at Wakefield. He was the son of Francis Oley, clergyman, and his wife, Mary Watterhouse.
In 1607 Oley entered Wakefield grammar school.
In 1617 he was admitted to Clare College as a Cave Scholar.
Graduated BA in 1621.
Having been elected a probationer fellow of the foundation of Lady Clare at the college on 28 November 1623, he proceeded MA in 1625 and was elected a senior fellow in 1627.
In 1633 he was appointed to the college living of Great Gransden, Huntingdonshire, which he held for the rest of his life, but due to his duties as a Fellow he continued to live in Cambridge for many years.
In 1634–5 he served as taxor (price regulator), for the university, and in 1635–6 as proctor.
He started the rebuilding of Clare College on 19 May 1638, although work was not finished until 1715.
Oley was a Royalist and on 8 April 1644 he was ejected from his Fellowship by Edward Montagu, 2nd Earl of Manchester on the grounds of non-residence in Cambridge and failure to appear before the commission of visitors. All his personal and landed property was confiscated and he was forced to leave Great Gransden.
During the late 1640s he led a wandering and impoverished life.
In 1643 and 1646 he was in Oxford.
During the sieges of Pontefract in 1644 and 1645 he preached to the Royalist garrison defending the castle.
By 1647 he had been sequestered from the impropriate rectory of Warmfield, Yorkshire, which his father had resigned in 1643.
Having helped Sir Marmaduke Langdale to escape in 1648 from prison and a death sentence, the following year Oley had to compound for delinquency in assisting the forces against parliament, and was fined £30. A further £50 was added in 1652, in lieu of which he was required to settle £5 a year on the minister of Warmfield.
In 1659 Oley returned to Great Gransden and on 9 July 1660 he was restored to his Fellowship at Clare College by order of the same Earl of Manchester.
On 3 August 1660 he was presented to the third prebendal stall of Worcester Cathedral.
In 1663 he left his Fellowship.
In 1664 he was the leading benefactor of the brick school house at Gransden, which he endowed with £20 a year. He built brick houses for six poor people on his own freehold land, leasing them for one thousand years to the churchwardens for the time being at a peppercorn rent, and he erected a vicarage.
He had given a pulpit to Gransden church in the first months of his incumbency in 1633 and in 1681 he provided wainscot seats for the chancel.
On 8 November 1679 he was nominated to the archdeaconry of Ely, but the following year he resigned this preferment because of doubts of his ability to discharge its duties. However, he retained the stall at Worcester until his death.
Oley died at Great Gransden on 20 February 1686, and in accordance with his will was buried there on the night of 22 February.
In his will he left 100 marks (£67) to Clare College for building a library, and £10 to the descendants of John Westley, the builder of the College.
A charity was set up in his name, with assets in Warmfield, Kirkthorpe, and Great Gransden, overseen by the fellows of Clare College and still operating with limited resources in the late twentieth century.