A method for increasing production in a liquid hydrocarbon reservoir formation comprising the steps of introducing a nanoencapsulated composition solution capable of reducing the surface tension of a liquid hydrocarbon fraction, where the nanoencapsulated composition solution comprises a nanocapsule and a carrier fluid, such that the nanocapsule is dispersed in the carrier fluid; allowing the nanoencapsulated composition solution to interact with the liquid hydrocarbon fraction such that the surface tension of the liquid hydrocarbon fraction is reduced such that at least a portion of the liquid hydrocarbon fraction is capable of being displaced; introducing a water fraction into the wellbore under conditions such that at least a portion of the liquid hydrocarbon fraction is displaced from the liquid hydrocarbon reservoir formation; and recovering the at least a portion of the liquid hydrocarbon fraction and at least a portion of the nanoencapsulated composition solution using the wellbore.