Your solution would work, but anything that can leak eventually will and cleaning up a spill in a muddy basement would be a nightmare -- and if you don't clean it up the stink will be unpleasant. I was once on a technical advisory board for oil heat research. A saying in the industry is: "oil stinks, gas explodes".
Another solution that could not cause an oil spill would be to use an ultrasonic sensor looking from the top to sense the level of the oil in the tank. Such sensors are available very inexpensively, e.g., $2.99 at
https://tinyurl.com/y7zwej58.
You would need some additional electronics, though, and a simple power supply -- which could be just some AA batteries. Perhaps you know of an "electron" near you that would enjoy helping you with this. If you lived near me, I love little projects like this -- but I'm in MN. BTW, at 74, schlepping up and down the cellar stairs is good for you unless you have disabilities or the creaky stairs are dangerous for you. At 76, I no longer zoom up and down the stairs like a horny teenager about to miss a phone call, but I do eventually get there. Did two loads of laundry today -- 4 trips up and down. Changed my sheets today. It ain't Easter yet but I don't like to wait until the last minute, ya know...