This study investigated capillary-trapped CO2 depending on the consideration of hysteresis effect in relative permeability for various water-alternation-gas (WAG) operating conditions to ascertain the oil production process. From the simulation results of CO2 WAG flooding method, the trapped CO2 led to prevent water-flow, in which CO2 acts as a gas blocker near the well. It caused the injection pressure increase during water injection period. As the trapped CO2 in pores increased, the reservoir pressure was also increased and maintained above minimum miscibility pressure (MMP). Ultimately, it was concluded that the reservoir was kept under miscible conditions throughout WAG process, reducing residual oil and increasing oil recovery.