The Oracle is a character in Aladdin and the King of Thieves. An Egyptian spirit inside a mysterious staff, she sets Aladdin off on a quest to find his lost father when he asks about whatever happened to him.
Apparently all-knowing, she is capable of answering any question. However, the Oracle is bound by one rule: One question, one answer.
In her words, every person may ask her a single question and be answered. Afterwards, the Oracle cannot answer a question to the same person. She refuses to break this rule to Iago, but is more apologetic to Aladdin.
The questions the Oracle answers do not have to be directly at her, as shown when Iago wondered out loud ("VERY loud", as noted by Genie) why the King of Thieves had wanted the scepter which houses the Oracles spirit when there were other, seemingly more valuable treasures to steal. Since she heard the question, and as it was indirectly about her, the Oracle declared, "Your question is mine to answer!"
Otherwise, one in possession of the Oracle's scepter can summon her and then ask their question directly to her, as shown when Aladdin did so. In this instance, when he asked where his father was, the Oracle told him how to "Follow the trail of the Forty Thieves", but also warned him, "Your father is trapped within their world."
This additional information implies the Oracle can not only answer a question but provide a single additional piece of information regarding the answer.
Iago: "With all the other great stuff why go for this thing?" The Oracle replied to Iago's (indirect) question by revealing that the King of Thieves sought the location of the Hand of Midas.
Aladdin: "Where is my father?" The Oracle recommended Aladdin follow the Forty Thieves' trail to find Cassim. She also pointed out that Cassim was trapped in their world, but did not elaborate.
Cassim: "Where can we find the Hand of Midas?" The Oracle revealed that the Vanishing Isle would appear at dawn and guided Cassim and the remaining Forty Thieves to its location.