[3] It is located less than 15 kilometres (9.3 mi) south from the city centre of its larger neighbour, Nyköping, with the two urban areas forming a wider agglomeration of nearly 50,000 people.

In the 19th century, an increased extraction from the mining district of Central Sweden (e.g. Bergslagen), made Oxelösund a harbour of transport.

A local railroad company was established in 1873 and bought virtually the entire peninsula, which then belonged to the estates of the Stjärnholm Castle.

Oxelösund has a hybrid between a maritime and humid continental climate, with moderated patterns which stem from its position at the head of a peninsula, with the weather station facing the open sea.

In much of the urban area and up the peninsula the climate is somewhat more prone to swings, something intensifying farther north as in Nyköping.