The effect of oxygen adsorption on the local structure and electronic properties of monolayer graphene grown on SiC (0001) has been studied by means of low-energy electron microscopy (LEEM), microprobe low-energy electron diffraction (\ensuremath{\mu}LEED), and microprobe angle resolved photoemission (\ensuremath{\mu}ARPES). We show that the buffer layer of epitaxial graphene on SiC (0001) is partially decoupled after oxidation. The monitoring of the oxidation process demonstrates that the oxygen saturates the Si dangling bonds, breaks some Si--C bonds at the interface, and intercalates the graphene layer. Accurate control over the oxidation parameters enables us to tune the charge density modulation in the layer.
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