Meanwhile, beat the egg yolks in another bowl until it is slightly thicker. Add the sugar and mix until incorporated. Add water, oil and vanilla extract. Mix well.
Add flour mixture gradually to the yolk mixture and mix until the batter is smooth. Gently fold the egg whites to the yolk batter in three additions until batter is uniform. Pour batter into an ungreased10-inch tube pan. Bake for 55-65 minutes, or until a toothpick inserted in the middle of the cake comes out clean. Set tube pan top of two overturned mugs and let cool.
To unmold cake, loosen sides and bottom with a knife. Using your hands, gently press the sides of the cake downwards to loosen it more. remove gently and invert to a serving plate.