The sprinkling of oil on sea waves reduces the surface tension of seawater, due to which a net force acts from lesser surface tension to more surface area and it calms the sea wave.
When oil is sprinkled into the ocean, the sea breeze distributes it in the direction of the wind's motion. Since seawater has a surface tension that is higher than that of oily water, it will drag oily water in the opposite direction from the breeze.
As a result, the seawater's surface develops an oil coating. It will cause the waves to slow down.