...to convert Oblivion's DirectSound to OpenAL via a soundcard?

Based on research I've been doing, a huge portion of Oblivion's performance issues on modern technology are due to Microsoft getting rid of DirectSound after Windows XP. Because of this, Oblivion forces the CPU to render sound, taking up processing power.

My understanding is that it is possible to get your hardware to convert the sound into OpenAL, making it the same (or close) to how it would be with just using DirectSound.

TL;DR does anyone know how to emulate DirectSound on modern soundcards? I have an ASUS Xonar Essence STX if that helps.

I have no idea, but it sounds like an interesting way to get better performance out of Oblivion. There is a http://www.gamesas.com/topic/1574094-the-community-tech-thread-no-153/you might want to post in. I am not sure how many tech experts are active here in the Oblivion General forum and your question sounds like it could have broader applications than just Oblivion, but might help with any older game relying on DirectSound, so I think it would be appropriate in the general tech thread, where there are a lot more active tech experts.

If you find an answer though please post it here so we can see how to do it.

Yeah, I'll post there and if I get a reply I'll post back.