An upscaling method is developed for two-phase immiscible incompressible flows in layered reservoirs with good communication between the layers. It takes the effect of gravity into consideration. Waterflooding of petroleum reservoirs is used as a basic example for application of this method. An asymptotic analysis is applied to a system of 2D flow equations for incompressible fluids at high-anisotropy ratios, but low to moderate gravity ratios, which corresponds to the most often found reservoir conditions. The 2D Buckley-Leverett problem is reduced to a system of 1D parabolic equations in a layered reservoir. For low-gravity ratios, it can further be reduced to a system of hyperbolic equations. The number of the 1D equations in the system is equal to the number of layers in the reservoir. The method is tested on different examples of displacement in a layer-cake reservoir. Different combinations of gravity-viscous and anisotropy ratios are tested. Solutions by our method are compared with the results of 2D simulations carried out by the COMSOL solver. The results are comparable, especially if the layers of the reservoirs are further subdivided into sublayers, in order to account better for gravity segregation. The effects of gravity are analyzed.