Pour oil to a depth of 3 inches into a Dutch oven; heat over high to 360°F.
Meanwhile, stir together flour, salt, and pepper in a shallow dish. Stir together buttermilk, egg, and water in a second shallow dish, and place crushed potato chips in a third shallow dish. Dredge oysters in flour; dip in egg mixture, and dredge in crushed chips, pressing to adhere.
Fry oysters, in batches, in hot oil until golden brown, 2 to 3 minutes. Serve immediately with Horseradish Rémoulade.