Oil rings going around on the water? (4)
I believe the answer is:
otto
'oil' is the definition.
(otto can mean rose oil)
'rings going around on the water?' is the wordplay.
'rings' becomes 'oo' (multiple circles).
'going around' means one lot of letters goes inside another.
'on the water?' becomes 'TT' (TT can mean teetotal, not drinking alcohol).
'oo' enclosing 'tt' is 'OTTO'.
(Other definitions for otto that I've seen before include "perfume ingredient" , "German emperor" , "- - Preminger (films)" , "Something oily" , "Rose petal oil; Bismarck's name" .)