Highly fractured siliciclastic reservoirs that had experienced hydrocarbon accumulation failure proximal to igneous intrusive bodies were encountered in the Subei Basin, China. Within the Paleocene Funing Formation, pervasive reservoir pyrobitumen indicates a paleo-oil accumulation. Publicly available burial history shows that the reservoirs reached a maximum burial temperature (∼140°C) in the present day, which is much cooler than the commonly presumed oil-generation high-temperature limit (at least 160°C). This is interpreted as resulting from a scenario whereby igneous activity forced in-reservoir thermal cracking following initial oil charge. Petrographic textures indicate two distinct phases of oil inclusion trapping: an early phase synchronous with silica diagenesis and a later phase occurring after silicification and carbonate cementation and concurrently with fracturing. The older oil inclusions record the initial oils that served as precursors to the pyrobitumen, while the younger generation was likely formed during oil cracking. Fissure calcites containing primary oil inclusions yield a laser ablation-multicollector-inductively coupled plasma-mass spectrometry U-Pb age of 44.3 ± 1.5 Ma, coinciding with the published timing of volcanism. Homogenization temperatures from aqueous inclusions lie between 177.1°C and 198.3°C, broadly consistent with clumped isotope temperatures (195.5°C ± 6.5°C) of fissure calcites and with bitumen Raman-derived temperatures (163.7°C–212.9°C). These observations suggest that rising temperatures that accompanied the mid-Eocene igneous intrusion resulted in the initial oils being in situ thermally cracked into short-chain hydrocarbons and pyrobitumen. The resulting volumetric expansion, in conjunction with reduced permeability from pyrobitumen deposition, led to hard overpressures, consequent fracturing, and hydrocarbon leak-off.