Oblivion is hardly demanding.
A cheap card like a Radeon 5450 would provide multiple times more performance.
Yeah, it's true, but you get a graphical quality sub-par to the quality of Morrowind itself, much less Oblivion.
You're correct that Oblivion is hardly demanding, if you know how to maximize your card to oblivion's settings. In that aspect, there are a lot of Faqs online which help you set-up the Config file of Oblivion to that end.
But when you got tons of enhancement mods, Natural enviroments, graphical overhauls, texture enhancements, lighting enhancements and such, it can become extremely taxing for old graphic cards.
My current laptop has a Geforce 9650 GT Go and it performs rather well on 1280x800 everything Max and with all mods installed, and it can also run Crysis at 1280x720 with High setting at over 30 FPS. The difference is, since it's a laptop, the suggestion you have made isn't viable. You can't overclock a laptop graphics card, if you don't want to risk serious overheat and massive battery consumption.
Current PC Build
CPU - i7 8700K 3.7 GHz (4.7 GHz turbo) 6 cores OC'd to 5.2 GHz with Watercooling (Hydro Series H110i) | MB - Gigabyte Z370 HD3P ATX | Gigabyte GTX 1080ti Gaming OC BLACK 11G (1657 MHz Boost Core / 11010 MHz Memory) | RAM - Corsair DIMM 32GB DDR4, 2400 MHz | PSU - Corsair CX650M (80+ Bronze) 650W | Audio - Asus Essence STX II 7.1 | Monitor - Samsung U28E590D 4K UHD, Freesync, 1 ms, 60 Hz, 28"