We use a multi-resolution analysis based on a wavelet transform to upscale a 3D fractured reservoir. This paper describes a 3D, single-phase, and black-oil geological model (GM) that is used to simulate naturally-fractured reservoirs. The absolute permeability and porosity of GM is upscaled by all the possible combinations of Haar, Bior1.3, and Db4 wavelets in three levels of coarsening. The applied upscaling method creates a non-uniform computational grid, which preserves its resolved structure in the near-well zones as well as in the high-permeability sectors but the data are scaled up in the other regions. To demonstrate the accuracy and efficiency of the method, the values for the oil production rate, mean reservoir pressure, water cut, and total amount of water production are studied, and their mean error is estimated for the upscaled models. Finally, the optimized model is selected based on the computation time and accuracy value.