The most common reason magicka is not regenerating in Oblivion is due to being afflicted by a hidden disease, most notably "Astral Vapors." This disease specifically stops magicka from regenerating. It may not always be clearly indicated in the game, but it can be checked by looking at your character's active effects tab. To fix this, cure the disease by:
- Using a Cure Disease Potion, which can be bought from alchemists or brewed with ingredients like Mandrake Root,
- Casting a Cure Disease spell,
- Praying at an Altar of the Nine in any Chapel for a free cure (without infamy),
- Consuming ingredients with cure disease effects.
Once cured, magicka will regenerate normally again. Other potential causes include wearing the Atronach birthsign, which stunts magicka regeneration, but the disease is the most frequent culprit causing this issue suddenly in gameplay.