When exactly is the oil mixed in as the second step? Rabbi Yehudah the Prince says that this is done after the offering has been made into loaves, but the Sages say that one mixes the oil in while it is still flour.
There are two oven-baked offerings, challot and wafers. Challot require mixing with oil, whereas wafers are smeared with oil after baking. Smearing is done in the form of the Greek letter chi, and the remaining oil is consumed by the kohanim.
Art: Jacques Linard - Still Life Of A Plate Of Plums And A Loaf Of Bread
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