While its hard to see in that picture for sure, I see two things going on. First, the eye has been significantly damaged. Its a shame, because that's a beautiful Oscar and he's darn near perfect otherwise. The eye is also cloudy, which may be a sign of infection, but probably is more the result of the damage.
I would
not treat with antibiotics at this point. In all likelihood, they'll do nothing, but may significantly impact your biological filter, as well as all the usual reasons not to treat unnecessarily with antibiotics. I would remove him, if he's easy to catch, to a quarantine tank for a while, though, until that eye starts to heal. Melafix is fine, though I don't personally think it does anything more than adding a bottle of water to the tank would.
I don't think he's going to keep that eye, though. It may completely cloud over and he'll lose vision in it, or he might just lose the eye.