The Permian Fengcheng Formation in the Junggar Basin, particularly within the Mahu Sag, has become a focal point for shale oil exploration. However, the hydrocarbon generation potential, palaeoenvironmental conditions and organic matter accumulation in the relatively underexplored Hala'alat Mountain area, located northwest of the Mahu Sag, remain insufficiently understood. This study systematically investigates the hydrocarbon generation potential, palaeoenvironmental conditions, and organic matter accumulation of the Fengcheng Formation shales from Well HS-1 in the Hala'alat Mountain area through comprehensive chemostratigraphic analyses, including total organic carbon (TOC) content, Rock-Eval pyrolysis and handheld X-ray fluorescence (XRF). TOC values range from 0.08 wt.% to 2.83 wt.%, with significant enrichment below 2020 m, indicating enhanced preservation of organic matter at greater depths. Hydrogen index (HI) values suggest a predominance of oil-prone Type II kerogen, while Tmax values (418 degrees C-442 degrees C) confirm the thermal maturity of the organic matter, placing it within the primary oil generation window. Chemostratigraphic trends reveal a significant palaeoenvironmental shift at 2020 m of Well HS-1, transitioning from an anoxic, saline, and arid environment in the lower section to a more oxygenated, fresher and humid environment in the upper intervals. Redox-sensitive proxies, combined with palaeosalinity and palaeoclimate indicators, suggest that optimal conditions for organic matter preservation occurred below 2020 m, where sustained anoxia, moderate salinity and limited terrestrial input facilitated the accumulation of organic-rich sediments. These findings provide essential insights into the hydrocarbon potential and depositional history of the Fengcheng Formation and offer a valuable framework for future exploration in this underexplored region.