There are many factors that cause water to enter into the engine oil, including leaking intake manifold gaskets, cracked engine castings and a blown head gasket. One main reason, the formation of water as a petroleum byproduct, is part of normal engine operation
Even in completely sealed engines, water enters and forms condensation within the engine. For every gallon of petrol burned, a little more than a gallon of water vapor is formed as a byproduct. During the process of longer trips, the engine reaches its ideal operating temperature, and the heat makes any condensed water to evaporate. If the car travels only short trips, abnormal water accumulation can be caused because the engine does not get to a temperature that is sufficient to burn off the excess water.
If water is discovered to be mixing with the oil in a V-style engine that has intake manifolds sealed to the block, then the intake manifold water jacket gasket may be leaking into the inside of the engine. Such leaks occur happen when bacteria builds up in the antifreeze or coolant solution. This bacterium eventually eats through engine parts.
Additionally, a blown head gasket also could make water to mix into engine oil. If this happens, then the vehicle requires immediate attention and service, since blown head gaskets lead to engine malfunction