Preheat oven to 350 degrees. Grease two 8" baking pans with cooking spray. Add in 2-3 tablespoons of flour and tap it to cover the pan's sides and bottom. Tap out the extra flour into the garbage.
In a large mixing bowl, add in butter, sugar, and vegetable oil. Mix on medium speed until the mixture is thoroughly combined.
Add in the eggs one at a time. As soon as each one is incorporated, add another. Once all the eggs are combined, beat for an additional 3 minutes. It will become thick and very pale. This is absolutely necessary!
Measure out the milk and vanilla. Set aside.
In a separate bowl, sift the flour, baking soda, and baking powder.
Alternately add the flour and milk mixture, starting and ending with flour. Mix on medium speed until combined.
Divide the batter into two 8" prepared pans. Bake for 23 - 30 minutes or until done. Use a toothpick and insert it into the center of the cake. If it comes out clean, the cake is done. If there is batter or moist crumbs on it, let it go for another minute or two. My one pan was done at 23 minutes and my other one that was more full was done at 30 minutes.
Let the cake cool in the pan for 15 minutes and then turn out onto a cooling rack to finish cooling.
In a large mixing bowl, add in butter and peanut butter. Mix on medium until combined.
Add in the powdered sugar and milk and mix on low. Once the powdered sugar is pretty much incorporated, turn the mixing on high and let it go for 3 minutes to give the frosting a whipped texture.
Spread on cooled cake. Spread a layer of peanut butter frosting in the center of the cake. Build a dam around the edges of the cake with the frosting. I did this by placing excessive frosting around the edges and building it up.
I then just spread the grape jam on top of the peanut butter frosting. Place the top layer on. Be careful not to push down and squish out the jam. Work the peanut butter frosting onto the sides. You may need to place the cake in the fridge/freezer to harden the frosting up so the jam doesn't leak out the sides.