Pound steak to 1/4-inch thickness; rub steak with oil. Brown on both sides over medium-high heat in an ovenproof Dutch oven. Add next 8 ingredients. Cover; bake at 350° for 1 1/2 hours. Add potatoes; bake an additional 30 minutes.
Remove steak and potatoes to a serving platter; reserve pan drippings in Dutch oven. Remove bay leaf.
Combine flour and a small amount of water; stir until smooth. Pour mixture into pan drippings. Cook over low heat, stirring constantly, until thickened. Spoon over steak and vegetables. To serve, cut steak diagonally across grain into thin slices.