Can oral tradition be used as a reliable source in scholarly papers?
You ask specifically about an &quot;oral tradition&quot;, but only speech which has been somehow recorded can be cited. Oral history is a whole subfield with an Oral History Association which has published Principles and Best Practices for using these histories. Most of the best practices pertain to the acquisition of new oral histories, but there is also a section on using existing oral histories:

All those who use oral history interviews after they are made accessible should strive for intellectual honesty and the best application of the skills of their discipline. This includes
a. avoiding stereotypes, misrepresentations, and manipulations of the narrator’s words;
b. striving to retain the integrity of the narrator’s perspective;
c. recognizing the subjectivity of the interview, including, when possible, verification of information presented as factual;
d. interpreting and contextualizing the narrative according to the professional standards of the applicable scholarly disciplines;
e. contextualizing oral history excerpts;
f. providing a citation to the location of the full oral history.