This valve will isolate the downstream supply of oil should the hand wheel be turned to the off position, or should the heat from a fire melt the eutectic soldered link on the hand wheel.
Several things can cause an oil-fired boiler to overheat, for example, if the thermostat fails. This has the potential to cause a fire.
In the event of overheating, for whatever reason, the valve shuts off the supply of oil to the appliance, thus preventing the danger of a runaway fire.