The dissolution of heavy oil represented by Tsingtao vacuum residuum (VR) in supercritical water (SCH2O) was investigated with molecular dynamics simulations. The dissolution of oil fractions in SCH2O is promoted by the electrostatic attraction with SCH2O but suppressed by the interaction between oil fractions themselves. According to the simulation started with the oil-in-water emulsion structure, light fractions of saturates and aromatics dissolve rapidly in SCH2O. The dissolution of heavy fractions of resins and asphaltenes, which contain a large number of benzene, naphthenic, and heterocyclic rings, in SCH2O, however, is suppressed, and can be adjusted partly by varying the thermodynamic state of water. By the differences in the solubility of oil fractions in SCH2O and the operation conditions applied, the mixture of Tsingtao VR and SCH2O exists in the two-phase, oil-in-water emulsion or the pseudo single-phase structure. In the emulsion structure, the dissolution of light fractions into the continuous SCH2O surroundings is accelerated, leaving heavy fractions concentrated in the oil droplets.