The global demand for lithium, which is indispensable for electric cars and electrical devices, has increased. Lithium recovery from oilfield-produced water is necessary to meet the growing need for lithium-ion batteries, protect the environment, optimize resource utilization, and cut costs to ensure a successful energy transition. It is useful for keeping water supplies in good condition, adhering to legal requirements, and making the most of technological advances. Oil and gas companies might see an increase in revenue gained through the lithium extraction from generated water due to the recouping of energy costs. Therefore, this review focuses on contamination and treatment strategies for the oilfield-produced water. It includes a discussion of the global lithium trade, a financial analysis of lithium extraction, and a comparison of the various methods currently in use for lithium extraction. It was evaluated that economic considerations should be given priority when selecting environmentally friendly methods for lithium recovery from oilfield-produced water, and hybrid methods, such as adsorption–precipitation systems, may show promising results in this regard. Lastly, future prospects for the lithium industry were also discussed.