It’s not a chemical thing, just physical.
When oil is on fire, it’s extreme hot, about 230C (450F). So when you put water in oil, it vaporize immediately, causing mini-explosion, which splatter the oil everywhere, and that oil is on fire. To make matter worse, water is heavier than oil, which mean that whatever water that isn’t vaporize immediately is gonna go down at the bottom and then vaporize and explode, just to make sure that the oil splatter even harder.
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