The depletion of fossil fuels and the increasing demand for fuels worldwide have urged researchers to search for alternatives to traditional fossil fuels. Recently, different researchers introduced various technologies to upgrade the Heavy Fuel Oil (HFO), a Fuel Oil Blended Stock (FOBS) residual from the petroleum refinery. The cracking of HFO into a lighter fuel with higher efficiency on burning and economic value was introduced. In this study, n-eicosane was chosen as a surrogate fuel for the multicomponent HFO due to the high percentages of hydrocarbon in HFO. The purpose of this study was to investigate thermodynamic modelling of FOBS cracking into light hydrocarbon in the presence of oxygen based on the total Gibbs energy minimisation method. The effect of different reaction conditions on the cracking of n-eicosane was studied. Equilibrium product compositions of n-eicosane at temperature range of 573 K - 1273 K, pressure of 1 bar, n-eicosane/oxygen ratios (EO) (0.5:0.5, 0.7:0.3, 0.8:0.2, 0.9:0.1, 0.95:0.05) were studied. The results revealed that the main products contain hydrogen gas, carbon, n-alkanes and 1-alkenes. The results showed that C-C bond homolytic scission through free radical mechanism prevailed in the reactions. Simulation results demonstrated that a small amount of induced oxygen in the cracking process increased the production of lighter hydrocarbons. Production rate of desired hydrocarbons can be controlled under optimum conditions. Current research on oxygen-induced cracking is still limited. This research proved that the presence of oxygen in the cracking process is cost-saving and could be introduced in the refinery as a solution to FOBS issue.