A mixture of oil and water is called an emulsion. An emulsion is defined as a mixture of two liquids that normally do not combine. When the liquids are shaken or stirred, a temporary emulsion occurs; however, after a short period of time, the liquids separate into individual layers.
There are methods to produce a permanent emulsion that require the addition of a third substance. This additional substance is known as an emulsifying agent or an emulsifier. When oil and water are combined with soap or detergent, a permanent emulsion occurs. The soap or detergent acts as an emulsifier, and the two liquids do not separate into distinct layers.