In reality, the remaining oil in the ultra-high water cut period is highly dispersed, so a thorough investigation is required to understand the microscopic remaining oil. This will directly influence the technological direction and allow for countermeasures such as enhanced oil recovery (EOR). Therefore, this study aims to investigate the state, classification method and utilization mechanism of the microscopic remaining oil in the late period of the ultra-high water cut. To achieve this, the classification of microscopic remaining oil based on mechanical mechanism was developed using displacement CT scan and micro-scale flow simulation methods. Three carefully selected mechanical characterization parameters were used: oil–water connectivity, oil–mass specific surface and oil–water area ratio. These give five types of microscopic remaining oil, which are as follows: A (capillary and viscous oil cluster type), B (capillary and viscous oil drop type), C (viscous oil film type), D (capillary force control throat type), and E (viscous control blind end type). The state of the microscopic remaining oil in classified oil reservoirs was defined after high-expansion water erosion. Based on micro-flow simulation and analysis of different forces during the displacement process, the main microscopic remaining oil recognized is in class-I, class-II and class-III reservoirs. Within the Eastern sandstone oilfields in China, the ultra-high water-cut stage is a good indicator that the class-I oil layer is dominated by capillary and viscous oil drop types distributed in large connected holes. The class-II oil layer has capillary and viscous force-controlled clusters distributed in small and medium pores with high connectivity. In the case of the class-III oil layer, it enjoys the support of capillary force control throats that are mainly distributed in small holes with high connectivity. Integrating mechanisms of different types of micro-remaining oil indicates that, enhancing utilization conditions requires increasing pressure gradient and shear force while reducing capillary resistance. An effective way to improve the remaining oil utilization is to increase the pressure gradient and change the flow direction during the water-drive development process. Hence, this forms a theoretical basis and a guide for the potential exploitation of remaining oil. Likewise, it provides a strategy for optimizing enhanced oil recovery in the ultra-high water-cut stage of mid-high permeability oil reservoirs worldwide.