It is technically hard to reach in case of optimal city placement here (which would have been building a city on the hex where the encampment is - or one tile E/W of it) and very hard in you situation, but not impossible - cities can acquire tiles in the 4th ring and beyond. They just need a lot of culture production to do so and you can't directly speed up the process by purchasing them (though you can indirectly force them to start to use the culture sooner for that purpose by buying every tile up to and including the 3rd ring and/or by placing other cities in unwanted directions to "nudge" the growth in the 4th and beyond rings only in the sector of the "right direction")
Thanks for the explanation!
Probably not a bug then.
Although, what you describe would require a lot of anticipation and Oil is a late-game discovered resource.
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