The accumulation of immobile residual water during CO₂ injection for brine displacement significantly impairs storage efficiency, injectivity, and fluid migration—key factors for scaling up CO₂-based energy technologies. This study investigates the factors governing residual water saturation under different CO₂ phases and effective stress conditions in simulated subsurface environments. The results indicate that under constant effective stress, gaseous CO₂ yields the highest residual water saturation, followed by its supercritical and liquid states. As such, an inverse relationship is observed between residual water saturation and storage efficiency/capacity, underscoring the potential for jointly optimizing energy recovery and CO₂ sequestration. The analysis of the CO₂-brine-rock system confirms that capillary forces control residual water saturation. Increased interfacial tension or contact angle cosine value raises capillary entry pressure, hindering displacement and elevating irreducible water saturation. Moreover, higher effective confining pressure reduces capillary radius and creates "dead pores", thereby increasing capillary pressure and enhancing water trapping in the core. The findings give critical insights into how CO₂ phase behavior and confining pressure govern residual water saturation, displacement efficiency and migration in the reservoir, directly informing strategies for optimal CO₂ storage reservoir selection and enhanced oil recovery operations.