The efficiency of a foam displacement process in enhanced oil recovery (EOR) depends largely on the stability of foam films in the presence of oil. Experimental studies have demonstrated the detrimental impact of oil on foam stability. This paper reviews the mechanisms and theories (disjoining pressure, coalescence and drainage, entering and spreading of oil, oil emulsification, pinch-off, etc.) suggested in the literature to explain the impact of oil on foam stability in the bulk and porous media. Moreover, we describe the existing approaches to foam modeling in porous media and the ways these models describe the oil effect on foam propagation in porous media. Further, we present various ideas on an improvement of foam stability and longevity in the presence of oil. The outstanding questions regarding foam-oil interactions and modeling of these interactions are pointed out.