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Two-phase flow in faults is complex and difficult to predict. To analyse the effect of fault zones on fluid flow, this article presents a hierarchical geological/numerical framework aimed at simulating two-phase flow. The starting point is that fault zones consist of structures at several length scales, with each scale represented by suitable techniques within the same numerical model. A series of two-phase flow simulation experiments was conducted on four geological cases: one reference case with undeformed host rock and three cases with increasingly more complexity added to them. All the structures consist of lower permeability fault rocks in a high permeability host rock. The simulations were performed using an in-house flow simulator. The fault core (large scale) was modelled explicitly through local grid refinement, the subsidiary faults (intermediate scale) were represented in a discrete manner, while an upscaling procedure captured the effect of the deformation bands (fine scale). The simulation results show that each scale has a significant effect on the saturation, pressure drop and oil production, and that capillary pressure and anisotropic permeability are important parameters. The results emphasize the importance of the scale-dependent approach for analysing the effect of faults on two-phase flow.