An improved system and method for refining various types of used oil involves using solvents to treat used oil in a system designed to recycle the solvents and produce minimal waste byproducts. The system includes a main reactor for enabling the used oil and the solvents to react chemically and for wasted products to dissipate and separate through sedimentation. The system also includes a reservoir for providing a second opportunity for a chemical reaction and sedimentation of waste byproducts before the mixture of refined oil and solvents enter a housing unit configured to be heated to separate the refined oil from the solvents via vaporization and subsequent condensation. Thereby, the solvents are recycled and made available for reuse in further treatment of used oil.