Like any other car part, oil is important for reasons other than just plain lubrication. Heat absorption, engine cleaning, reliable starting and stopping are just three of the jobs this crucial liquid plays.
Oil is the lifeblood of any engine. For instance, the proper flow of oil past various metal parts ensures proper lubrication correctly. Imagine what would happen if the oil were allowed to fall below the amount needed for engine protection. The engine would, in short order, become a fused mass of metal.