Nanomaterials are being employed to enhance the performance and durability of equipment such as pipes and drilling bits. They are used as smart additives in drilling fluids, cementing, and fracturing operations. Owing to their exceptional mechanical, electrical, and thermal properties, a wide range of nanomaterials has been applied across multiple domains. Research on these materials has progressed beyond laboratory and simulation studies, with several successful field implementations reported worldwide. However, as the use of engineered nanoparticles expands rapidly, it is essential to assess their potential risks to human health, ecosystems, and the environment. While nanotechnology holds significant promise for the upstream oil industry, establishing clear standards and sustainable infrastructure is necessary to minimize potential harm and ensure economic feasibility. In this review, we explain the current applications of nanotechnology in upstream operations, assess its effectiveness through laboratory and field data, and highlight the major challenges and future prospects for its industrial deployment.