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When Dagny crashes in Galt's Gulch, we learn that Ellis Wyatt has been experimenting with new ways of producing oil.

However, there's no textual evidence that he was researching new applications of oil (unlike Hank Rearden, who actively researches new applications for his metal).

Here's the problem: the main applications of oil are engines of various kind (diesel engines, airplane engines, car motors). John Galt's motor obsoleted oil-burning engines; there's absolutely no reason that you'd ever develop anything but an electric motor. The fact that John developed the prototypes of the motor while he was at the 20th Century Motor Company, it seems likely that it was likely originally intended for use as part of car engines. Dagny pointed out that it could be used to replace a lot of other existing motors, too, such as engines for trains.

Also, the existence of Rearden Metal would drastically reduced energy consumption anyway because it was so much lighter than steel. For example, Hank Rearden told Dagny that he wanted to eventually make planes out of his metal.

I suppose that oil is also used in plastic manufacturing, it's currently not the primary source of raw material for plastic making in the U.S.. According to the linked article,

Although crude oil is a source of raw material (feedstock) for making plastics, it is not the major source of feedstock for plastics production in the United States. Plastics are produced from natural gas, feedstocks derived from natural gas processing, and feedstocks derived from crude oil refining. The U.S. Energy Information Administration (EIA) is unable to determine the specific amounts or origin of the feedstocks that are actually used to manufacture plastics in the United States.

Petrochemical feedstock naphtha and other oils refined from crude oil are used as feedstock for petrochemical crackers that produce the basic building blocks for making plastics. EIA data can only identify those oil-derived feedstocks specifically designated as petrochemical feedstock by petroleum refineries in EIA’s refining surveys, which break out into Naphtha For Petrochemical Feedstock Use and Other Oils For Petrochemical Feedstock Use. However, the petrochemical industry also consumes large quantities of hydrocarbon gas liquids (HGL), which may be produced by petroleum refineries or natural gas processing plants.

In 2016, most of the HGL produced in the United States (85%) were byproducts of natural gas processing, and the remaining 15% were from crude oil refineries.

Point being oil production isn't even the main source of raw material for plastic anymore. (I have no idea if this was the case at the time that the book was written, though, or the extent to which it's true in other countries).

According to this list, oil is used in some quantity in a number of everyday household items (even things like, for example, toothpaste and deodorant). However, I doubt that any of these applications come anywhere near the amount of oil that's consumed for cars, airplanes, certain types of energy production, etc.

That being the case, it seems like the majority of the use of oil would be for legacy purposes (e.g. cars, airplanes, etc. that hadn't been retrofitted with non-oil-based motors yet). Even in some of these, the amount of oil consumed would be reduced over time. For example, if they started manufacturing boxcars out of Reardon Metal, the overall weight of freight trains would've been reduced, which would've reduced the need for oil (even if Taggart Transcontinental was still using Diesel engines). In other words, the largest application of his product was becoming obsolete.

Why wasn't Ellis Wyatt doing more about the fact that the largest application of his only product was becoming obsolete?

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There are a few possible answers here.

First, while the text doesn't say that Wyatt was exploring new applications, it doesn't say that he wasn't either. So it's quite possible that he was, but that the text didn't mention it - Dagny just happened to have seen him working on that project.

A second possibility is that Wyatt thought that the problem of restarting production as quickly as possible after the Strike ended was a much more urgent problem, and that he'd have time to explore new applications after he solved that problem.

A third possibility is that he thought that other applications of oil would allow him to sell as much oil as he was capable of for the time being. If that was the case, most likely he assumed that the economy would grow with his ability to produce oil. For example, demand for plastic and other items produced from oil would likely grow as the economy improved.

And, of course, the final possibility is that that's just a plot hole, but that's not a particularly "in-universe" explanation.

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