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When light passes from one clear medium into another, it (usually) bends—a phenomenon called refraction. Distortions caused by refraction are part of why you can see objects that are clear.
The oil in the tank is optically similar to glass, so light doesn’t bend when it passes from one to the other. Without the telltale distortions of light caused by refraction, the glass rods disappear when lowered into the oil. Meanwhile, since lenses magnify images by bending light, the lens doesn’t work anymore either.
One rod is made of a different type of glass (flint glass), which refracts light differently than oil, so it doesn’t disappear.