In Oblivion, the Strength attribute primarily affects three key aspects of your character:
- Melee Damage: Strength determines how much damage you deal with melee weapons such as swords, axes, maces, and also affects hand-to-hand combat damage. Each point of Strength increases your melee damage by about 0.5% of the weapon's base damage. However, damage bonuses cap at 100 Strength; beyond that, increasing Strength will not further increase melee damage
- Encumbrance: Strength sets your maximum carry weight, calculated as Strength × 5. This means the higher your Strength, the more items you can carry without becoming over-encumbered
- Fatigue: Strength contributes to your total Fatigue pool, which determines how much physical activity you can perform before becoming exhausted. Fatigue is calculated as the sum of Strength, Agility, Endurance, and Willpower. Strength increases maximum Fatigue but does not affect fatigue regeneration rate (which is mostly influenced by Willpower and Agility)
Additional notes:
- You need at least 30 Strength to drag dead bodies.
- NPCs comment on your muscularity when your Strength reaches 70 or higher.
- Strength values above 100 continue to increase your maximum Fatigue and Encumbrance but no longer increase melee damage
In summary, Strength in Oblivion boosts your melee damage up to a point, increases how much you can carry, and raises your maximum stamina (Fatigue), making it a vital attribute for melee-focused characters.