Oil–water separation is one of the oldest practices in the purification of water or oil. Environmentally concerned organizations pay more attention to the purification of water, while oil companies concentrate on the purification of oil. Water management is particularly an important issue in the production of hydrocarbons, because volumes of water steadily increase as a field ages. In fact, increasing costs of water handling such as separation, disposal, treatment, maintenance, and environmental risks make the oil production scheme uneconomic. Recently, several downhole oil/ water separation technologies have been proposed to reduce water volume in the oil production, but they are not yet technically efficient and cost effective. One of the most recent technologies introduced is membrane separation technology. In the past, polymeric membranes have been used for liquid–liquid separation. These membranes induce high pressure drop and are very expensive. This study identifies a novel material that allows oil to pass through it but not water. After in-depth investigations, a surprising capability of Xerox bond paper having different basis weight (24 lb, 32 lb) was discovered. This material was found to permeate oil selectively from an oil/ water mixture. The recovery of oil was more than 85%, which is high in separation efficiency. The oil permeation flux through the paper surface was measured as a function of various operating parameters. The permeation of oil flux was possible only at finite pressure difference. The recovery of oil was increased with the increase of oil concentration in the feed mixture. The permeation of flux was affected with filtering medium thickness, feed flow rate, and pressure, but these parameters did not affect the ultimate oil recovery.