bluestone

I recently got a '97 Honda Civic CX hatchback 5 spd manual transmission and while replacing an oxygen sensor I noticed the leak on the passenger side (that the solid red line is pointing to). How serious of a problem is this?

Wankenstein

Is the passenger side CV axle boot near that "leak" torn? If so, that could be grease, instead of oil, that is spraying out of the boot during driving.

Other than that start from the top of the engine (valve cover gasket) down to pinpoint a possible leak. Passenger side leaks can be valve cover gasket. oil pan gasket, rear main seal, PCV valve/grommet.

ezone

I'd associate that with grease slung from the CV boot......If there is not evidence of leakage from this axle, it may be leftover evidence from a previous axles' boot leaking.