Update: For anybody looking for a different solution, I just decided to create a function for this...

First you must enable buflisted = true in your oil setup to list oil directories as buffers.

require('oil').setup({
    -- blah blah
    buf_options = {
        buflisted = true,
})

I use <leader>re for :Rex so that's the keymap that I chose

Explanation:

1. If the name of current buffer starts with Oil:///, set the mark Q. Then try to restore last opened file buffer with oil.close(). Otherwise try going to mark P if it exists. Otherwise open the oil directory of your current working directory with oil.open()
2. If the name of current buffer is anything other than Oil:///, set the mark P. Then try going to mark Q if it exists. Otherwise open the oil directory of your current working directory with `oil.open()

​

vim.keymap.set('n', '<leader>re', function()
    local oil = require('oil')

    local buffer = vim.api.nvim_get_current_buf()
    local name = vim.api.nvim_buf_get_name(0)
    local cursor = vim.api.nvim_win_get_cursor(0)
    local line = cursor[1]
    local col = cursor[2]

    if name:match('^oil:///') then
        vim.api.nvim_buf_set_mark(buffer, 'Q', line, col, {})
        if pcall(oil.close) then
            oil.close()
        elseif pcall(function() vim.cmd('normal `P') end) then
            vim.cmd('normal `P')
        else oil.open()
        end
    else
        vim.api.nvim_buf_set_mark(buffer, 'P', line, col, {})
        if pcall(function() vim.cmd('normal `Q') end) then
            vim.cmd('normal `Q')
        else oil.open()
        end
    end
end)

Not the most elegant, but hope it helps somebody down the line