Different from the conventional oil reservoirs, the primary storage space of shale is micro/nano pore networks. Moreover, the multiscale and multi-minerals characteristics of shale also attract increasing attentions from researchers. In this work, the advances and challenges in the development of shale oil are summarized from following aspects: phase behavior, flow mechanisms, reservoir numerical simulation and production optimization. The phase behavior of fluids confined in shale nanopores are discussed on the basis of theoretical calculations, experiments, and molecular simulations. The fluid transport mechanisms through shale matrix are analyzed in terms of molecular dynamics, pore scale simulations, and experimental studies. The methods employed in fracture propagation simulation and production optimization of shale oil are also introduced. Clarifying the problems of current research and the need for future studies are conducive to promoting the scientific and effective development of shale oil resources.