Proximity to the tank is not a concern.

"Can I just cut the cable and install a junction box..."

It is not that simple.

You will not have the required wire length unless you replace a section of the cable, or use two boxes with additional cable added between them.

Thanks for your replies. Fortunately for me, the cable was kind of bundled up in that corner, so I have about two feet of slack to work with, more than enough to ensure that 8 inches of cable enter the box on each side. My only concern was the proximity to the oil tank.

If the tank is creating vapors that are flammable proximity to a JB is the least of your worries.

Having some slack is handy, if not always attractive.

If it's fuel oil, the fumes are not that flammable.

"If it's fuel oil, the fumes are not that flammable."

Harder to ignite, but still flammable.

The spark in the injector gun has no problem.

So we do not become distracted, an indoor tank must be vented to the outside. Any fuel oil fumes inside would be intolerable to the occupants. A junction box does not create any spark or release any spark energy unless there is a problem with the contained splices.

Like I initially said, "If the tank is creating vapors that are flammable proximity to a JB is the least of your worries."

The system is set up to prevent actual vapors from being present inside the house, and correctly installed connections do not produce sparks.

Fuel oil is flammable, NOT combustible.