The lubricating oil industry is widespread in the world, but getting rid of the used oils has become an environmental concern. Lubricating oils are used in industries and cars but potentially contaminate groundwater after use. This research uses montmorillonite clay to refine old oil treated with acetic acid. Compared to more conventional procedures, the suggested strategy for treating waste oil is more cost-effective due to the relatively inexpensive cost of the acid and the modest process conditions. Water content, sediment content, density, flash and fire points, viscosity, viscosity index, total acid and base number, pour points, and refractive index were among the physicochemical parameters of the treated oil that were examined as a result of this treatment. We analyzed the oils using Fourier transform infrared spectroscopy (FTIR) and atomic absorption spectrometry (AAS). New oil (10w 40), old oil, oil treated with acetic acid, and montmorillonite clay were all put through their paces in a battery of tests. The therapy’s physical and chemical alterations were examined across all fields. The findings demonstrated the efficiency of montmorillonite clay due to the strength of the acid to separate the sludge and the lack of compounds hazardous to the environment. The process described here enables recycled oil to be reclaimed as base oil.