Advanced to Knight Grand Cross of the Order of the Bath in the 1989 New Year Honours, Oswald became First Sea Lord and Chief of the Naval Staff in May 1989. In that capacity he advised the British Government on the reduction in the size of the fleet under the Options for Change restructuring programme and on the deployment of Naval Support for the Gulf War in 1991: he also made the decision that members of the Women's Royal Naval Service should be allowed to serve in Royal Navy ships. He was promoted to Admiral of the Fleet on his retirement in March 1993.