Ok, here is what I have been taught in College about fat loss and cardio. For the first 20 min of cardio, fairly easy breathing, you can talk fairly easily, you are burning glucose in your blood stream. You run out of that fairly easily. Then, as long as you aren't gasping for breath, your body will switch over to the fat stores. Anything after about 20 min of aerobic activity will be fat calories.
If you are gasping for breath your body will turn to the muscle stores. As there is not enough oxygen to provide your body with the fat burning. The soreness in your muscles that you are feeling is lactic acid building up that your muscles are producing due to lack of oxygen. This is a survival response that your body does automatically.
Chemically speaking you have to have oxygen to make your body burn fat. Oxygen is part of the chemical reaction, without it, there will be no fat being used.
Hope this helped.
Kathy