Depends on what type of material they are made of. Many fishermen are converting over to drag grease such as Cal's Universal Drag Grease. Oil on the wrong material will result in a reduction of drag in the end.
It may be that the washers are out of round, have flat spots, and may need to be replaced. Or, they may just need a shot of grease and may be fine.
I use Cal's myself. Its one of the best out there, IMHO. There are others that work well though, such as Ardent Reel Butter, Penn makes one still I believe, and others if you look. Just be sure to distinguish the difference between drag grease and gear grease. They are not always the same thing.
The grease that is made for drag washers is not just any grease. There are formulas made for heat, friction, etc.. so be careful what your using.
The website mentioned is a good place for info.
