Nanoparticles (NPs) are currently gaining wide acceptance in the field of petroleum engineering. They are applied in different areas of petroleum exploration and production such as drilling, well logging, reservoir management, and enhanced oil recovery (EOR). Due to the size of NPs, they have special physical and chemical properties. Therefore, NPs can influence the properties of the fluid system, including viscosity, magnetism, and interfacial tension (IFT). The injection of NPs into the reservoirs for EOR is more effective than water injection but not as effective as chemical flooding. Consequently, NPs are injected along with low salinity water (LSW) or chemicals such as surfactant in order to improve the recovery of oil. NPs are used to prevent the fines migration during LSW injection, control the mobility of formation water, and reduce the surfactant adsorption on the pore walls of the reservoir. The improvement in oil recovery, when NPs are injected in combination with LSW or chemicals in the reservoir, can be attributed to the variations in the properties of the fluid system and the rock-fluid interactions. This study comprehensively reviews the mechanisms behind these variations. LSW injection improves the oil recovery by altering the rock wettability from oil-wet to water-wet. However, this study reveals that the dispersion of NPs in LSW does not necessarily change the rock wettability towards water-wet. The wettability of the system may shift towards oil-wet instead of water-wet depending on the concentration of NPs. Improvement in oil recovery depends on the effective surface charge and the volume fraction of dispersed NPs in the solution. Aggregation of NPs in solution should be avoided because it lowers the recovery by plugging the pore throats. The stability of NPs dispersed in solution with increasing concentrations of salt and surfactant is reviewed and the resulting effect on the IFT of the solution is analyzed. NPs dispersed in different types of surfactant show different behaviors of IFT. The behavior of the IFT depends on the concentration of surfactant, the amount of dispersed NPs (concentration), the type of surfactant (anionic, cationic, and non-ionic), and the effective charge of NPs (positive, negative, and neutral). The combination of LSW with surfactant for oil recovery has two opposing impacts. The IFT reduces while the contact angle increases with an increase in salinity. The mechanisms responsible for the variations in the properties of the system when the combination of LSW, surfactant, and NPs are used for oil recovery are reviewed in this study. Understanding the mechanisms behind the interactions at the fluid-fluid and the fluid-solid interfaces will aid in designing an effective fluid system that combines LSW, surfactant, and NPs for successful implementation of EOR in sandstone and carbonate reservoirs.