Is anyone among you sick? Let him call for the church's elders, and let them pray over him, anointing him with oil in the name of the Lord. James 5:14
They cast out many demons and anointed them with oil; many sick healed them. Mark 6:13
This was to fulfill what the prophet Isaiah said: “He took our illnesses and bore our diseases.” Matthew 8:17
The uniting of the sick person to the passion of Christ, for his good and that of the whole Church;
The strengthening, peace, and courage to endure in a Christian manner the sufferings of illness or old age;
The forgiveness of sins, if the sick person was not able to obtain it through the Sacrament of Penance/Reconciliation;
The restoration of health or preparation for passing over to eternal life.
Why is it necessary for a priest (or bishop) to administer this sacrament?
Because forgiveness of sins is one of the effects of the Anointing of the Sick, a priest (or bishop) must administer the sacrament. Deacons and laity can pray for the sick and dying, but not to the same effect as this sacrament.