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The oil on your starter island won't power more than two plants. The trading port is on the beach because you are supposed to import more oil from the New World. That's why it's the central location.
As for your city layout, you can move existing building. Trust me, it's not the end of the world scenario you're envisioning. You don't have to tear down half your city to put in a one-tile wide corridor.
Railways also don't take a lot of space, since they're 1x1 per piece and you don't need all that many separate lines to run them efficiently.
Oil never able to be traded.
Make sure one of your power plants is near the coastline, build a Steam Shipyard in range of the Power Plants (they need electricity to operate). Build a Motor Assembly Plant (also need electricity).
The few oil wells you're able to build on your starting island are meant for you to be able to get this up and running, not to run your entire civilization on.
Awesome! Yeah, the Tetrising can be real sometimes, but your problem solving skills are on point.
I hope this helps, good luck!
^^^ This.
My first city sucked. We all (who didn't first look up a game guide) went through it.
Important tip : Tankers are now avaiable to buy in the Harbourg of Sir Archibald ....
You will now soon why .....
He's currently not selling anything tho I'll be able to make my own. IDK if that's cuz I waited too long or what.