It should work for Barbarossa, where both sides are going through tanks like potato chips, but it will make a mess of the rest of the war, particularly the Pacific.
It will only work for that if the production penalties for an oil shortage (like the one Germany faced) is ultra-severe.
Regardless, both sides will not go through units like potato chips all the time. Initially as you should know, the Germans had astounding success on the Eastern Front and only got bogged down due to a combination of weather conditions, poor infrastructure, Soviet partisanship, and straining of gasoline supplies and supply lines. I can't confirm nor deny it, but I have heard before that at the coldest temperatures of the Eastern Front, the Germans would have to keep their trucks and mechanical units always on and running or the gasoline and oil inside would freeze which would be very heavily taxing on oil/gasoline.
Even if that isn't true, the Germans had to cover vast swathes of land both on land and in air. This would be massive uses of oil to help feed their war machine when moving into the Soviet Union. The issue with Hearts of Iron 4 is no units cost oil when moving, when in reality moving expends the most oil. Germany also having initial success on the Eastern Front (which should be simulated by the effects of the Great Officer Purge) means they won't be losing tanks nearly as much as the Soviets, so the Germans will not be using up anywhere near as much oil as the Soviets when in reality the Germans had to use more and more to keep covering all that land.
I'm very much scared that oil will not make-or-break militaries in HOI4 like it did in real life. They should make units cost very little oil up front and instead make units cost oil whenever moving provinces. In the event of an oil shortage, the unit will move at a significantly reduced rate or not at all.
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