On my Tartan 37 that I have owned for 30 years, the factory oiled the teak, as was common in production boats at the time. I continued this and an deeply regret it now. I used Tung oil, various brands of teak oils and Watco (recommended by Tartan at the time) over the years and am sorry I ever applied any of them. As is mentioned by others, the oils trap moisture and eventually produce mold embedded in the goo of teak oil residue. This stuff is nearly impossible to remove by any method I have use so far other than strippers, scraping, and 3M pads that goo up rather quickly. I desperately wish I had stripped the oil when I first got the boat. I am working to remove the oil goo and mold, brighten the teak and move to varnish---but confident I will not live long enough to complete the job. I hate oil on teak. I understand it is cheap, easy and looks good for short periods, but warn folks of the long term problems. My boat is dry and has had a forced air diesel heater in it--I cannot imagine what would have happened to a more normally moisture laden vessel's interior. Below deck wood looks dark and ugly. I recommend against oil in any form on boats.
I was pleased that Ericson had apparently varnished the interior of my 32-200 from the factory and the PO had done nothing to it. I have refinished all the interior in the same manner as Christian with a couple coats of thinned gloss for a base to seal it (I prefer Flagship) and a couple of final coats with Epiphanes Rubbed effect. It is beautiful and wears like iron.