When the bottomhole pressure (BHP) of volatile oil reservoirs falls below the bubblepoint pressure, two phases are created in the region around the wellbore, and a single phase (oil) appears in regions away from the well. The oil relative permeability reduces towards the near-wellbore region due to increasing gas saturation. This behaviour is quite similar to a gas-condensate reservoir below the dew-point, where the gas relative permeability is reduced due to the existence of a liquid bank around the wellbore. There are numerous publications in the literature concerning the behaviour diagnostic and well deliverability calculation in the case of gas-condensate reservoirs. However, the behaviour of volatile oil reservoirs is not well understood. This paper aims at understanding the behaviour of volatile oil reservoirs. We used reservoir compositional simulations to predict the fluid behaviour below the bubblepoint, and then exported the flowing bottomhole pressure to a well test package to diagnose the existence of different mobility regions. In this study, the applicability of the two-phase pseudo-pressure method on volatile and highly volatile oil reservoirs was investigated, and it was found that this method is a very powerful tool for the prediction of true permeability and mechanical skin. Also, this method is capable of distinguishing between mechanical skin and condensate bank skin, which can be very helpful for designing after-drilling well treatment and IOR process designs.