Effective water management in oil reservoirs is crucial for maximizing hydrocarbon recovery while minimizing environmental degradation. This paper investigates the potential of innovative chemical techniques to control water production in oil reservoirs and compares these methods with traditional mechanical strategies. By reviewing over 70 case studies extensively, this research provides a detailed evaluation of different approaches to managing water cut. The study reveals that chemical methods, particularly those utilizing advanced polymer-based gels, are generally more effective than mechanical techniques. These methods are especially advantageous in settings with high water cuts and geologically complex reservoirs. Chemical treatments provide greater adaptability and cost-efficiency, significantly reducing the environmental impact compared to mechanical approaches. The primary aim of this research is to analyze the sources of water cut and evaluate common water shutoff operations to enhance reservoir management based on specific challenges, reservoir characteristics, and economic considerations. Our findings suggest using a two-step strategy: starting with mechanical control methods and then applying chemical treatments specifically designed for the reservoir’s unique physical properties. This not only improves oil recovery rates but also enhances economic efficiency by extending the reservoirs’ lifespan. Future research should focus on developing cost-effective, environmentally friendly chemical solutions suitable for various geological settings. Such advancements could significantly refine water management practices in oil fields, leading to better economic and environmental outcomes.