“As lithium-ion battery fires create their own oxygen during thermal runaway, they are very difficult for fire and rescue services to deal with. Lithium-ion battery fire control is normally only achieved by using copious amounts of water to cool battery cells.”

Source: Fire Protection Association

As far as I understood lithium ion batteries still need oxygen from the air to burn.

This is incorrect.

The most common method for addressing a lithium-ion vehicle fire involves fully submerging the vehicle to allow the energy to dissipate as steam.

However, many underground parking facilities in my area are beginning to ban electric cars, as more fires start to occur, and retrofitting the necessary tanks to ensure fire safety is proving challenging.

Li-ion fire safety is a very difficult thing.

Most likely, it could help slow the process (buy time for firefighters to arrive) in some percentage of cases.

Provided large amounts of nitrogen and an already empty battery (devoid of chemical energy), in a small percentage of cases, it might prevent a fire.

However, having seen a lithium polymer cell heat up from mechanical damage (a drone crash), I can confidently tell that very high temperatures can be achieved without oxygen. They'll just be even higher with it.

If it were the case that Li-ion fires could be extinguished by depriving them of oxygen. They wouldn't really be this much of a problem in the first place