The present invention is directed to a system for producing and separating oil. The system comprises an oil-bearing formation, a low salinity aqueous fluid having an ionic strength of less than 0.15M and having a total dissolved solids content of from 200 ppm to 10000 ppm, a brine solution having a total dissolved solids content of greater than 10000 ppm, and a demulsifier. The system further comprises a mechanism for introducing the low salinity aqueous fluid into and oil-bearing formation, a mechanism for producing oil and water from the formation subsequent to introducing the low salinity aqueous fluid into the formation, and a mechanism for contacting the brine solution and the demulsifier with the oil and water produced from the formation and for separating the produced oil from the produced water.