I have a theory on why oil is less effective on the upper body. Think of the way you tickle somebody's ribs, for example. It usually doesn't involve sliding your fingers on the skin, but rather manipulating the tissue under the skin. Oil isn't going to assist that at all. If anything it will hinder your efforts to get traction.
However the feet are a different matter. If you try tickling a foot like you do a set of ribs, you're not going to get much in the way of results except in those cases where the victim's feet are so ticklish that any touch at all will send them into orbit. Tickling the feet generally involves sliding and friction. Oil enhances our ability to maximize the sliding effect while minimizing any discomfort from too much friction.
Having said all that, there is something very sexy about a woman covered in oil, as long as it isn't SAE10W30.