Oxygen is involved in many chemical and biological reactions in wine.
On the positive side, O2 is involved in the polymerization reactions
of tannins and anthocyanins facilitating the softening of astringency
and stabilization of color, respectively.

On the negative side, O2 is known to promote the formation of
acetaldehyde (ethanal) in wine, giving rise to a rotten apple smell.
Acetaldehyde is formed through a two step process. First step, O2
reacts with a vicinal phenol, such as caftaric acid, to produce a
quinone and H2O2. In the second step, H2O2 reacts with ethanol, the
most abundant alcohol in wine, yielding acetaldehyde and water. The
quinone product of step one is also electrophilic and is believed to
oxidize other components in the wine.
The presence of oxygen is necessary for obligate aerobes such as
Acetobacter to grow and potentially spoil wines by producing large
amounts of acetic acid or other off-flavors and aromas. It goes
downhill from there, Acetic acid and ethanol can form ethyl acetate
which has a sharp, nail-polish-remover-like odor. O2 also contributes
to browning as it is required for production of polyphenol oxidase
(PPO)- and laccase-catalyzed quinones which undergo further chemical
reactions to produce brown pigments.

You can find more specific info in:
Boulton, R. et al. 1996. Principles and Practices of Winemaking.
Chapman and Hall, New York.

RD