Abstract: The Dongying Sag is rich in shale oil reserves, but poor in reservoir physical properties. The sag has many thin oil-bearing layer sequences in the vertical direction, which are mostly interlayered with limestone and mudstone. To precisely describe the law for the interlayer interference and the fracture propagation of the shale oil reservoirs in the Dongying Sag, a separate-layer fracturing model based on seepage-stress-damage coupling was built with the nonlinear finite element method. The morphology and law for fracture propagation, and induced stress field were analyzed considering different flow rates and viscosities of fracturing fluid, and different thicknesses of the upper and lower isolation layers. On this basis, the fracturing parameters were optimized. Simulation results show that the stress interference area grows along with the propagation of hydraulic fractures. When the flow rate is 9–12 mm³/min and the viscosity is 20 mPa∙s, the induced stress at the tips of fractures is high. In this case, natural fractures are prone to be connected and good stimulation results can be achieved. In addition, layer crossing is rare when the thickness of the upper isolation layer is greater than 2.5 m and that of the lower one is greater than 4.5 m. The results can provide theoretical support for the subsequent hydraulic fracturing of shale oil reservoirs in the Dongying Sag.