Long-term prediction of reservoir performance can be strongly influenced by stress sensitivity. As the effective stress in a reservoir increases due to production, the porosity and permeability decreases. Inelastic rock deformation mechanisms play a significant role in bringing about these changes in porosity and permeability. This paper shows that inelastic pore collapse can be the dominant mechanism in reducing pore space and permeability even when reservoir conditions are hydrostatic. The presence of a shear component in the in-situ stress can increase these effects. A numerical simulated reservoir study has shown that well work-over and stimulation projects could be warranted earlier than currently practiced.