Oil refinery sludge (ORS) management is a global concern, yet information on its low-cost biotransformation possibility is fairly limited. We present a novel approach for ORS mitigation by Eisenia fetida and Eudrilus eugeniae and aerobic composting (AC) in producing clean aqueous extracts (compost teas). Detailed physicochemical characterization, phytotoxicity assays, economic feasibility comparisons, and mathematical equation-based environmental and human health hazard prediction studies were done for all the earthworm and non-earthworm processed compost teas. The E. eugeniae-compost tea reduced Cr, Pb, Cu, Cd, and Zn contents by 52.7, 61.2, 41.8, 80, and 93.8%, respectively. The earthworm-sourced teas showed lower ecological risk (<300) than their aerobic counterparts. Seed germination in Pisum sativum and Cicer arietinum was 2–2.5 folds higher with vermi-derived tea application. Economic assessments illustrated the superiority of E. eugeniae-based biotransformation with higher cash flow and a lower payback time of 1.53 years. The mathematical predictions on human health showed no alarming status for any of the vermi/aerobic compost teas. Overall results implied that vermicomposting is safer and more beneficial than AC in the ORS bioconversion. However, this study warrants further research in exploring the efficiency of other earthworm species, feedstock selection, or seasonal variability in ORS management.