The correct option is A Statement 1 is true, Statement 2 is true; Statement 2 is correct explanation for Statement 1
As the oil is poured till it covers the object completely, pressure in water at all points keep on increasing. As a result, upward force on object exerted by water increases and the object moves up for the given duration.
So, Statement 1 is true, Statement 2 is true; Statement 2 is correct explanation for Statement 1.
OR
Let volume of block be V
Initially when block floats in water, equating force of buoyancy with blocks weight, we get
FB=mg
ρwV2g=mg
Now, when oil is poured till the block is covered, we get
Force of buoyancy as ρoV2g+ρwV2g
We can observe that,
Net upward buoyancy ρoV2g+ρwV2g>mg downward force.
Hence, block moves up.
As oil is poured on to the water, net pressure inside the water increases due to weight of oil above it.