Wireless underground sensor networks (WUSNs) are networks of sensor nodes operating below the ground surface, which are envisioned to provide real-time monitoring capabilities in the complex underground environments consisting of soil, water, oil, and other components. In this paper, we investigate the possibilities and limitations of using WUSNs for increasing the efficiency of oil recovery processes. To realize this, millimeter scale sensor nodes with antennas at the same scale should be deployed in the confined oil reservoir fractures. This necessitates the sensor nodes to be operating in the terahertz (THz) range and the main challenge is establishing reliable underground communication despite the hostile environment which does not allow the direct use of most existing wireless solutions. The major problems are extremely high path loss, small communication range, and high dynamics of the electromagnetic (EM) waves when penetrating through soil, sand, and water and through the very specific crude oil medium. Theobjective of the paper is to address these issues in order to propose a novel communication channel model considering the propagation properties of terahertz EMwaves in the complex underground environment of the oil reservoirs and to investigate the feasible transmission distances between nodes for different water-crude-oil-soil-CO2 compositions.