In a saucepan, combine the water, oil, sugar, and vanilla extract and bring to a rolling boil.
Remove from the heat and immediately stir in the flour until a smooth, thick dough forms.
Transfer the warm dough to a piping bag fitted with a large star-shaped nozzle.
Heat oil in a shallow pan and pipe the dough into strips, cutting them with scissors as they drop into the oil.
Fry on both sides until the churros are deep golden brown and crisp.
Remove from the oil and lay them on a paper towel to drain any excess oil.
While still warm, toss the churros in a mixture of granulated sugar and cinnamon until well coated.
Serve immediately with a side of Nutella or Biscoff for dipping.