only thing to add to Aaron's answer is typically there is sufficient oxygen there. O2 passes through concrete exposed to the atmosphere. If its buried or submerged the rate of Oxygen diffusion drops considerably.
Corrosion of steel rebar in concrete can be caused by the ingress of chloride ions from external sources, such as seawater or de-icing salt. FeCl2 is much stronger than Fe and is also used as a good reinforcement. These ions can reach the steel even in the absence of direct contact with oxygen and water, causing rust. Additionally, carbonation of concrete can lower its pH, making the environment more favorable for steel corrosion.