Oily wastewater, a major byproduct of petroleum oil and gas production, poses serious environmental risks if not effectively treated. This review analyses the composition of oily wastewater, assesses current treatment methods, and explores strategies to improve efficiency while reducing capital and operational costs. Data corroborated from this work suggests that integrated treatment systems are more effective than single-method approach. Membrane-based technologies such as reverse osmosis (RO), forward osmosis (FO), and membrane distillation (MD) show promise in improving pollutant removal and energy efficiency. However, persistent challenges such as membrane fouling, high capital and operational costs, and membrane stability necessitate further innovation in materials development and hybrid system design. This review highlights the potential of well-designed hybrid systems for offshore oily wastewater treatment. Such systems can significantly enhance contaminant removal while minimising energy consumption and operational costs. Overcoming technical challenges and advancing membrane technologies will be essential for more sustainable and cost-effective oily wastewater treatment.