<p>Polymer–nanoparticle hybrid fluids have gained significant importance for chemical enhanced oil recovery; however, the dispersion stability, flow behavior, and interfacial properties have not been systematically evaluated under moderate-salinity conditions. This study evaluates stability, physicochemical characteristics, and linear displacement efficiency of Al₂O₃–xanthan gum nanofluids under moderate saline conditions. Al₂O₃ nanoparticles were characterized using FTIR, XRD, SEM, and EDX, confirming their hydroxylated surface and crystalline structure. Nanofluids were prepared using xanthan gum with 5 mass% NaCl, and the stability was evaluated through zeta potential, UV–Vis spectroscopy, and SEM analysis. The optimized nanofluid showed moderate colloidal stability with a zeta potential of − 29&#xa0;mV and only a 5.15% decrease in UV–Vis absorbance over the aging period, indicating effective polymer-assisted stabilization. Rheological analysis revealed non-Newtonian shear-thinning behavior of nanofluid, which indicates weak and reversible interactions between xanthan gum chains and Al₂O₃ nanoparticles. Interfacial measurements showed that the addition of Al₂O₃ nanoparticles in xanthan gum polymer significantly reduced interfacial tension from 11 H to 4.78 mN m⁻¹ and reduced the contact angle from 66.54° to 53.6°, causing wettability alteration of sandstone core toward more water-wet conditions. Linear displacement performance using a transparent sandstone-packed model was investigated, where the optimized nanofluid achieved a displacement efficiency of 59% of the original oil in place after injection of 1.45 pore volumes. The combined improvements in dispersion stability, rheological response, and interfacial properties highlight the synergistic physicochemical interaction between xanthan gum and Al₂O₃ nanoparticles and provide a basis for further investigation under reservoir-relevant conditions.</p>