Threshold pressure gradient (TPG) and stress sensitivity which cause the nonlinear flow in low permeability reservoirs were carried out by experiments. Firstly, the investigation of existing conditions of TPG for oil flow in irreducible water saturation low-permeability reservoirs was conducted and discussed, using the cores from a real offshore oilfield in China. The existence of TPG was proven. The relationship between TPG and absolute permeability was obtained by laboratory tests. TPG increases with decreasing absolute permeability. Then, stress sensitivity experiment was carried out through depressurizing experiment and step-up pressure experiment. Permeability modulus which characterizes stress sensitivity increases with decreasing absolute permeability. Consequently, a horizontal well pressure transient analysis mathematical model considering threshold pressure gradient and stress sensitivity was established on the basis of mass and momentum conservation equations. The finite element method (FEM) was presented to solve the model. Influencing factors, such as TPG, permeability modulus, skin factor, wellbore storage, horizontal length, horizontal position, and boundary effect on pressure and pressure derivative curves, were also discussed. Results analysis demonstrates that the pressure transient curves are different from Darcy’s model when considering the nonlinear flow characteristics. Both TPG and permeability modulus lead to more energy consumption and the reservoir pressure decreases more than Darcy’s model.
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