The oxidation treatment (i.e., OX treatment) creates porosities or small pockets on the surface of the tool. Drops and molecules of the cutting fluid accumulate in these pockets and help with the lubrication of the tool.
The enhanced lubrication reduces the friction between the tool and the workpiece and helps to prevent chip welding. The added lubrication at the cutting edge also helps to improve the surface finish of the internal thread. The OX treatment does not add to the tools hardness or rigidity, but you can expect extended tool life in ferrous materials from the added lubrication.
Let us better clarify this concept in practice. Take the tapping of an AISI 304 stainless steel (hardness of 165~171 HB) workpiece material as an example. The chart above compares the amount of tool life of an SP-VA spiral fluted tap without any oxidizing surface treatment (to the left) and the tool life of the same tap with the oxidizing surface treatment. The chart highlights that the surface treatment has allowed a three-times longer tool life.
Given the above, Yamawa recommends the use of taps with OX surface treatment for tapping stainless steels and ductile and easy welding workpiece materials, such as the low carbon steels.