Abstract: A method of obtaining a refined oil product from low-grade oils containing a relatively large amount of water and/or sludge, which comprises the steps of introducing a low-grade oil directly into a fluidized bed type cracking furnace and subjecting it to thermal cracking therein, introducing the resulting efflux from said cracking furnace into a fractionation column and therein separating it into an overhead light vapor component which is removed from the top of said column and a heavy component which is recovered from the bottom of said column, cooling the overhead light vapor component and then feeding it into a gas-liquid separator to divide it into a vapor-phase stream and a liquidphase stream, and circulating a part of said liquid-phase stream to the top of the fractionation column as reflux while recovering the balance of the liquid-phase stream as the refined oil product.