In this research, oil-in-water emulsion, as an example of oily wastewater produced from crude oil desalting units in refineries, using oleic acid-coated magnetic micron-sized particles. This novel demulsification method is based on increasing the weight of dispersed oil droplets using magnetic micron-sized particles, which does not necessarily require the application of a magnetic field for demulsification and does not necessitate the addition of a surfactant. However, the magnetic property of the particles provides an opportunity for their recovery. The effect of seven factors—mixing time, temperature, acidity (pH), salt concentration, wettability (weight ratio of oleic acid to magnetic particles), mixing speed, and weight of magnetic particles, on the removal efficiency of the dispersed phase were evaluated. The results showed that, firstly, all the mentioned factors affect the demulsification efficiency and oil removal from water. Secondly, the highest oil removal rate was achieved by reducing the mixing time and increasing the amount of magnetic particles. However, the effect of acidity on oil removal is more significant, such that, the acidic conditions combined with the use of pure magnetic particles can lead to complete oil removal. Furthermore, to achieve an oil removal efficiency of 82% or less, it is possible to offset the consumption of the magnetic demulsifier by increasing the mixing time.