Abstract: A comprehensive research method to determine effective reservoir spaces of shale oil was formulated based on GRI shale porosity and oil saturation testing, high-pressure mercury injection and geochemical analysis. The pore size distribution, the smallest pore diameter limit for oil occurrence, and the porosity condition for recoverable oil from the Paleogene shale in the Dongying Depression were discussed. The relationship between porosity and pore size distribution showed that shale porosity is negatively correlated to the volume portion of pores smaller than 10 nm (diameter), while positively correlated to the volume of pores with diameter larger than 10 nm, and that the pores wider than 10 nm are the critical contributor to the reservoir space of high-porosity shale. Shale oil mainly exists in pores wider than 10 nm. The statistical relationship between OSI (Oil Saturation Index) and porosity showed that the shale with a porosity above 6.5% is favorable for the occurrence of recoverable oil.