The disclosed invention provides a method for recovering hydrocarbons from a subterranean formation by injecting an emulsion, comprising oil and water, into the formation. More specifically, the emulsion is stabilized using undissolved solid particles, which are preferably at least partially oleophilic. The solids-stabilized emulsion may be used either as a drive fluid for displacing hydrocarbons from the formation or to produce a barrier for diverting flow of fluids in the formation. Such solid particles may be either formation solid particles (i.e., indigenous to the formation) or nonformation solid particles (i.e., obtained from outside the formation). Nonformation solid particles may either be naturally occurring or synthetic. Some preferred solids include clays, quartz, feldspar, gypsum, coal dust, asphaltenes, and polymers. Carbon dioxide or another gas may be added to the emulsion to adjust the emulsion's viscosity to the desired level.