Overbased MgO dispersions with high magnesium content and acceptably low viscosities are reproducibly prepared without gel formation by heating to 280-360° C. a mixture of MgO, selected dispersants, low MW carboxylic acids, water and a combination of high boiling hydrocarbon and organic diluent, wherein water is more than 8%, typically more than 10% of the reaction mixture. No additional solubilizing or dispersing agents, promoters or reactants such as carbon dioxide, amines, alcohols etc are needed to obtain the desired dispersions. Compositions such as lubricating oils and fuels containing the overbased magnesium dispersions as additives are also disclosed.