Snake oil can be found initially in Olympia Myklos's office. Dr. Moribund's Snake Oil is used to repel snakes, and is useful when one wishes to subdue snakes.
Olympia Myklos keeps snake oil nearby due to the fact that she keeps a cobra named Barney as a pet. In addition, the Leyendecker Museum received a horde of Egyptian cobras that got loose, and she finds the snake oil useful in subduing them. Not long after Laura Bow finds the snake oil, Olympia explains what the snake oil is needed for before taking it to the Mammology Lab in the museum basement.