Catalytic aquathermolysis, a crucial aspect of chemical reutilization, converts the heavy components (such as resins and asphaltenes) of residual oil into lighter components. The use of transition-metal-based catalysts accelerates aquathermolysis reactions. It was observed that iron naphthenate exhibited greater efficiency for residual oils compared to manganese naphthenate and zinc naphthenate. Furthermore, the catalytic aquathermolysis of emulsified residual oil with iron naphthenate demonstrated an outstanding catalytic performance. Under the reaction conditions of 340 °C, 3 MPa, and 2 h, there was a remarkable decrease in viscosity and sulfur content of residual oil by 85.0 and 50.01%, respectively. Additionally, the alterations in the components of residual oils before and after aquathermolysis were examined through a four-component analysis and elemental analysis.