This paper reports the hydrogenation and dehydrogenation of tetralin and naphthalene as model reactions that mimic polyaromatic compounds found in heavy oil. The focus is to explore complex heavy oil upgrading using NiMo/Al2O3 and CoMo/Al2O3 catalysts heated inductively with 3 mm steel balls. The application is to augment and create uniform temperature in the vicinity of the CAtalytic upgrading PRocess In-situ (CAPRI) combined with the Toe-to-Heel Air Injection (THAI) process. The effect of temperature in the range of 210–380 °C and flowrate of 1–3 mL/min were studied at catalyst/steel balls 70% (v/v), pressure 18 bar, and gas flowrate 200 mL/min (H2 or N2). The fixed bed kinetics data were described with a first-order rate equation and an assumed plug flow model. It was found that Ni metal showed higher hydrogenation/dehydrogenation functionality than Co. As the reaction temperature increased from 210 to 300 °C, naphthalene hydrogenation increased, while further temperature increases to 380 °C caused a decrease. The apparent activation energy achieved for naphthalene hydrogenation was 16.3 kJ/mol. The rate of naphthalene hydrogenation was faster than tetralin with the rate constant in the ratio of 1:2.5 (tetralin/naphthalene). It was demonstrated that an inductively heated mixed catalytic bed had a smaller temperature gradient between the catalyst and the surrounding fluid than the conventional heated one. This favored endothermic tetralin dehydrogenation rather than exothermic naphthalene hydrogenation. It was also found that tetralin dehydrogenation produced six times more coke and caused more catalyst pore plugging than naphthalene hydrogenation. Hence, hydrogen addition enhanced the desorption of products from the catalyst surface and reduced coke formation.