Aquathermolysis is a promising process for improving the quality of heavy oil under reservoir conditions. However, the application of catalysts during the process can significantly promote the transformation of the heavy fragments and heteroatom-containing compounds of crude oil mixtures into low-molecular-weight hydrocarbons. This research paper conducted a comparative analysis of the catalytic effectiveness of water-soluble metal salts like NiSO4 and FeSO4 in the process of aquathermolysis to upgrade heavy oil samples extracted from the Ashal’cha reservoir. The temperature of the experiment was 300 °C for a duration of 24 h. Compared to the viscosity of the native crude oil, the Fe nanoparticles contributed to a 60% reduction in viscosity. The viscosity alteration is explained by the chemical changes observed in the composition of heavy oil after catalytic (FeSO4) aquathermolysis, where the asphaltene and resin contents were altered by 7% and 17%, accordingly. Moreover, the observed aquathermolytic upgrading of heavy oil in the presence of FeSO4 led to an increase in the yield of gasoline fraction by 13% and diesel fraction by 53%. The H/C ratio, which represents the hydrogenation of crude oil, increased from 1.52 (before catalytic upgrading) to 1.99 (after catalytic upgrading). The results of Chromatomass (GC MS) and Fourier-transform infrared spectroscopy (FT-IR) show the intensification of destructive hydrogenation reactions in the presence of water-soluble catalysts. According to the XRD and SEM-EDX results, the metal salts are thermally decomposed during the aquathermolysis process into the oxides of corresponding metals and are particularly sulfided by the sulfur-containing aquathermolysis products.