A vibrating fan could be due to dust buildup on the fan blades, something wrapped around the spindle or something else. By introducing oil, it will collect dust and cause the fan to wear faster and potentially seize at some point. So not only have you introduced a terrible smell into the room, you've also likely sent your fan on a path that will ultimately result in failure at some point in the future, most likely well before the usual failure window.
PC components are not like automotive or heavy machinery components - you don't just oil them for longevity. Most of them are designed to never require anything more than being cleaned by bursts of canned/compressed air and cleared of any debris.