A method for upgrading an oil stream containing naphthenic acid and sulfur contaminants is described. In this method, an oil stream with naphthenic acid and sulfur contaminants is upgraded by the following steps. First, the oil stream is mixed with an alkaline earth metal oxide in an amount effective to convert substantially all of the naphthenic acid contaminants to non-acidic compounds and alkaline earth metal carbonate and also to convert substantially all of the sulfur contaminants to alkaline earth metal sulfide. Then, the mixture is heated under a pressure sufficient to prevent vaporization of the mixture to a temperature sufficient and for a time sufficient to react the naphthenic acid contaminants with the alkaline earth oxide to form the corresponding non-acidic compounds and alkaline earth carbonates. In the meantime, substantially all of the sulfur contaminants react with the alkaline earth oxide to form the alkaline earth sulfide. After the desired reaction is complete, the alkaline earth carbonate and the alkaline earth sulfide is separated from the oil stream. Upgraded oil is thus obtained.