Objection 1. It would seem that the oil need not be consecrated. Because there is a sanctification in the use of this sacrament, through the form of words. Therefore another sanctification is superfluous if it be applied to the matter.
Objection 2. Further, the efficacy and signification of the sacraments are in their very matter. But the signification of the effect of this sacrament, is suitable to oil on account of its natural properties, and the efficacy thereof is due to the Divine institution. Therefore its matter does not need to be sanctified.
Objection 3. Further, Baptism is a more perfect sacrament than Extreme Unction. But, so far as the essentials of the sacrament are concerned, the baptismal matter needs no sanctification. Neither therefore does the matter of Extreme Unction need to be sanctified.
On the contrary, In all other anointings the matter is previously consecrated. Therefore since this sacrament is an anointing, it requires consecrated matter.
I answer that, Some hold that mere oil is the matter of this sacrament, and that the sacrament itself is perfected in the consecration of the oil by the bishop. But this is clearly false since we proved when treating of the Eucharist that that sacrament alone consists in the consecration of the matter (2, 1, ad 2).
We must therefore say that this sacrament consists in the anointing itself, just as Baptism consists in the washing, and that the matter of this sacrament is consecrated oil. Three reasons may be assigned why consecrated matter is needed in this sacrament and in certain others. The first is that all sacramental efficacy is derived from Christ: wherefore those sacraments which He Himself used, derived their efficacy from His use of them, even as, by the contact of His flesh, He bestowed the force of regeneration on the waters. But He did not use this sacrament, nor any bodily anointing, wherefore in all anointings a consecrated matter is required. The second reason is that this sacrament confers a plenitude of grace, so as to take away not only sin but also the remnants of sin, and bodily sickness. The third reason is that its effect on the body, viz. bodily health, is not caused by a natural property of the matter. wherefore it has to derive this efficacy from being consecrated.
Reply to Objection 1. The first consecration sanctifies the matter in itself, but the second regards rather the use of the matter considered as actually producing its effect. Hence neither is superfluous, because instruments also receive their efficacy from the craftsman, both when they are made, and when they are used for action.
Reply to Objection 2. The efficacy which the sacrament derives from its institution, is applied to this particular matter when it is consecrated. The Reply to the Third Objection is gathered from what has been said.
Source: Summa Theologica (New Advent)