Some oil furnaces have a supply and a return line. Mine had 2-3/8" lines that entered the top through a 2" bung cap that was compression sealed. The lines could be cut short of the bottom of the tank to stay out of the water that accumulates there from condensation. Your tank may have had the supply line come out of the bottom (poor plan) and the return go in the top. The line in your pic appears kinked for lack of sufficient radius.
Oil furnaces need yearly maintenance…not to mention the integrity of the oil storage tank. Did you check for rust on the bottom where the water inside settles to?