Abstract Stresses near any wellbore are different and likely to be higher than the far-field stresses. In addition, fluid production and the corresponding pressure drawdown lead to an increase of the effective stress. This increase results in a substantial reduction in the corresponding permeability, especially if the latter is primarily due to natural fractures. The phenomenon may result in unequal reduction in the components of the permeability tensor, thus inducing permeability anisotropy and, in certain naturally anisotropic cases, may alter the direction of the maximum and minimum permeabilities. A model, relating effective stress and permeability / permeability anisotropy has been employed to study the expected well performance and implications on hydraulic fracturing. The effect of the permeability alteration ranges from moderate to severe and appropriate reservoir exploitation must consider these phenomena.