Heat the oil in a Dutch oven medium-high heat. Add the short ribs and sear, turning to brown all sides. Sprinkle with 1 teaspoon salt and 1/8 teaspoon pepper.
Add 1 cup sliced onions and 1/2 cup of beef stock.
Cover the pan and reduce the heat to low. Simmer the short ribs until meat is tender, about 2 to 3 hours. Check occasionally and add a little more water or stock if needed.
Transfer the short ribs to heated platter; keep hot.
Pour the pan juices into a 2-cup measure or fat separator. Skim off fat and return 2 tablespoons of the fat to the pan.
Add enough stock (or water) to the remaining juices to measure 2 cups. Set aside.
Cook and stir the sugar into the reserved fat and cook over medium heat until lightly browned. Add the remaining 1 cup of onions and cook for about 5 to 7 minutes, stirring constantly, or until the onions are translucent and lightly browned. Stir the flour into the onions and cook, stirring, for 2 minutes.
Add in reserved 2 cups of pan juices and the vinegar. Continue cooking, stirring constantly, until the gravy mixture is thick and bubbling.
Season to taste with salt and pepper; serve the gravy with the short ribs.