Yes, oil is necessary for hair growth, but you make oils on your own so while many people choose to add additional oils to their hair, it is not absolutely necessary as long as you do not wash your hair too often.
Many shampoos and conditioners that we use have harsh chemicals and will strip your hair of healthy oils so people sometimes choose to add extra oil to help balance it out after washing. Some people prefer to use coconut oil or even olive oil, but these oil molecules have a hard time getting into the hair folicle so a smaller molecule oil like argon is recommended.