Embodiments of a method for producing bio-oil include hydrothermal liquefaction of a biomass (e.g., a lignocellulosic biomass) feedstock to provide a process stream comprising crude oil and an aqueous fraction. The process stream is catalytically upgraded by contact with a sulfided-ruthenium catalyst, in the absence of added hydrogen, at a temperature and pressure effective to reduce an oxygen content of the crude oil, reduce a nitrogen content of the crude oil, reduce a total acid number of the crude oil, increase a H:C mole ratio of the crude oil, reduce a density of the crude oil, reduce a moisture content of the crude oil, reduce viscosity of the crude oil, or any combination thereof, thereby producing an upgraded oil and an upgraded aqueous fraction, which are subsequently separated. The catalytic upgrading process may be a plug-flow process and/or may be performed at or near liquefaction conditions.