Fraxel laser will not harm your oil glands as the penetration of the laser beam is not that deep. With any laser treatment you will see some temporary dryness, but this should only be for a matter of days. Post treatment you are encouraged to use a bland moisturizer for comfort.
The initial dryness is the effect of the heat from the laser and the tiny little coagulated dots which are actually microscopic scabs.
Oil glands are affected by oral isotretinoin (Accutane) or absorbed photo sensitizers such as Levulan. There can be some lessening of overactive oil glands with Smoothbeam but nothing that harms them.