After serving aboard the cruisers Admiral Graf Spee and Karlsruhe he transferred to the U-boat arm in May 1937, and was appointed watch officer of U-20.

On 20 March 1941 during an attack on convoy SL-68 he damaged the British battleship HMS Malaya.

In March 1942 he joined the staff of FdU Nordmeer directing the U-boat war in the Norwegian Sea.

In September 1943 Oesten returned to active duty in U-861, sailing first to Brazilian waters where he sank another two ships and then around the Cape of Good Hope to join the Monsun Gruppe of U-boats operating in the Indian Ocean.

U-861 left Soerabaya, Dutch East Indies, in January 1945 carrying a cargo of vital materials, but only two torpedoes, and reached Trondheim, Norway, in April, just before the German surrender.