The Oligocene Linhe Formation (E3l) in the Linhe Depression, Hetao Basin, illustrates the “Hydrocarbon Generation Paradox” (the apparent contradiction between low TOC and high hydrocarbon yields). Where lacustrine source rocks with low total organic carbon (TOC, average 1.15%) have produced significant petroleum accumulations, including ultra-deep, high-yield oil flows. To clarify this contradiction, geochemical analyses (TOC, Rock-Eval pyrolysis, GC-MS) and gold-tube pyrolysis experiments were employed to investigate depositional conditions, organic matter characteristics and hydrocarbon generation kinetics of the underlying mechanisms of this paradox. The E3l source rocks were deposited in hypersaline, strongly reducing lacustrine environment. Low TOC reflects the combined effects of moderate paleoproductivity, effective preservation, and dilution by terrigenous inputs. Hydrocarbon generation kinetics reveal extremely low activation energies (C6+ peak at 47 kcal/mol) and high frequency factors, producing an early generation peak (Ro ≈ 0.68%). Three enhancement mechanisms: (1) mineral catalysis by illite/smectite clays and pyrite, lowering the reaction barrier; (2) TSR-H2S feedback, promoting catalytic cracking and yield amplification; and (3) over pressured conditions suppressing secondary cracking while driving episodic expulsion and efficient migration. This study proposes a genetic model of efficient preservation, catalytic hydrocarbon generation, and overpressure-driven expulsion, offering a framework for evaluating low-abundance source rocks in saline lacustrine basins globally.