Varnish creates a protective layer, while oil penetrates the wood. Varnish will resist stains well but will be more fragile and if there is a scratch, it will not be possible to repair it without re-sanding the entire damaged face. Conversely, with oil, it is possible to apply it again over a stain (once it has been cleaned with mild soap) or on a scratch, but oil is less resistant to stains or standing water.
Varnish is recommended for stairs (varnish or sealant), a kitchen or bathroom worktop. Oil will be recommended for a desk, a shelf or a low table, for example.
