Naturally fractured reservoirs are characterized by their complex nature due to the existence of natural fractures and fissures within the rock formations. These fractures can significantly impact the flow of fluids within the reservoir, making it difficult to predict and manage production. Therefore, efficient production from such reservoirs requires a deep understanding of the flow behavior via the integration of various geological, geophysical, and engineering data. Additionally, advanced simulation models can be used to predict reservoir behavior under different production scenarios and aid in decision making and effective management. Accordingly, this study presents a robust mathematical two-phase fluid flow model (FRACSIM) for the simulation of the flow behavior of naturally fractured reservoirs in a 3D space. The mathematical model is based on the finite element technique and implemented using the FORTRAN language within a poro-elastic framework. Fractures are represented by triangle elements, while tetrahedral elements represent the matrix. To optimize computational time, short to medium-length fractures adopt the permeability tensor approach, while large fractures are discretized explicitly. The governing equations for poro-elasticity are discretized in both space and time using a standard Galerkin-based finite element approach. The stability of the saturation equation solution is ensured via the application of the Galerkin discretization method. The 3D fracture model has been verified against Eclipse 100, a commercial software, via a well-test case study of a fractured basement reservoir to ensure its effectiveness. Additionally, the FRACSIM software successfully simulated a laboratory glass bead drainage test for two intersected fractures and accurately captured the flow pattern and cumulative production results. Furthermore, a sensitivity study of water injection using an inverted five-spot technique was tested on FRACSIM to assess the productivity of drilled wells in complex fractured reservoirs. The results indicate that FRACSIM can accurately predict flow behavior and subsequently be utilized to evaluate production performance in naturally fractured reservoirs.