Combine the broth with 1 cup of hot water. Heat the oil in a 12-inch skillet over medium-high heat. Add the bacon and cook, stirring to break apart the pieces, until just starting to crisp, 1 to 2 minutes. Add the mushrooms, onion, 1/2 tsp. salt, and 1/2 tsp. pepper. Cook, stirring often, until the mushrooms have cooked through and start to brown the bottom of the pan, 5 to 8 minutes.
Add the sherry and stir to release the browned bits from the bottom of the pan, about 1 minute. Sprinkle in the flour and stir constantly until the mixture has browned and is slightly dry and crumbly, about 30 seconds.
Whisk in half of the broth mixture and continue whisking until the liquid is absorbed into the flour, about 30 seconds. Whisk in the remaining broth mixture and bring the gravy to a boil. Reduce the heat and simmer, stirring occasionally, until thickened, 5 to 10 minutes.
Season to taste with salt and pepper and thin with water or broth if necessary. Transfer to a small saucepan, cover, and keep warm. Reheat the gravy if necessary before serving.
Make Ahead Tips
This gravy can be made up to 1 day ahead and reheated over medium-low heat.