Oyster cards use on National Trains

You don’t.

Oyster cards are London only.

I mean, there are some outer suburbs of London covered by Oyster but for Oxford you need a train ticket and Oyster won’t come into the equation except for getting you to the London station where your Oxford train leaves from.

And contactless cards or phone are a better option than Oyster.

There are some routes where you can use oyster such as going to Windsor or Gatwick.

This is the full map of the many national rail routes which Oyster can be used on. It doesn't always make sense to use it to Zone 9, as sometimes single paper fares from Zone 6 to Zone 9 can be cheaper- an example is Upminster to Grays on the Southend line. So you have to be careful.
https://www.nationalrail.co.uk/Rail-and-Tube-QR-Map-November-2022.pdf
Within Zones 1 to 6 there is no difference between Oyster fares and contactless fares. On a few lines you have to use contactless beyond Zone 6.
While you can use contactless as far as Reading on the way to Oxford, when the line has been repaired (after mid June) Advance fares from Paddington are usually by far the cheapest way to Oxford- not using either Oyster or contactless part of the way

While contactless is definitely an option, it’s a matter of opinion if it’s a better option for the tube, especially for those like me who have used the same Oyster card for years. I suppose there are pros and cons to both methods.

Oyster cards cannot be used to Windsor on either route. Contactless can be used on the GWR trains to Windsor & Eton Central.

For Gatwick- My information, from someone who knows the TfL fares system far better than me, is that you can use Oyster to East Croydon (or even Coulsdon further south, but East Croydon is the sensible change point) but you have to pay a normal fare beyond there. Either way that is still by far and away the cheapest way to get to Gatwick quickly.
If you have a night flight and little luggage the absolutely cheapest route is to get the commuter bus service X68 from Russell Square to East Croydon, then train forward.
Depending on the weather I might actually be trying that route on Tuesday afternoon. If the weather is good I'm going to be pier hopping in West London on the Thames Clipper/Uber boats, but the X68 is my reserve plan.

The general rule for Oyster is that (for National Rail) that it is London and a little bit further. The big exception is Gatwick where you can use your Oyster balance but it isn't part of capping.

For Oxford Oyster will take you as far as Paddington or Marylebone, then you need a train ticket from there (do check Marylebone as they have a less frequent slightly slower service advance fare of £5)