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Shale reservoirs are characterized by ultralow permeability and nanoscale confinement and exhibit significant challenges for efficient oil recovery and carbon storage. CO<sub>2</sub>-displaced enhanced oil recovery offers multiple benefits for CO<sub>2</sub> sequestration and enhanced oil recovery due to its strong miscibility and adsorption affinity. However, the coupled mechanisms of diffusion and competitive adsorption remain inadequately understood under realistic pore-structure conditions. In this study, a pore-scale lattice Boltzmann model incorporating competitive adsorption, miscible diffusion, inlet/outlet boundary conditions, and microfractures is developed and validated against molecular simulations and diffusion theory. Then, the effects of injected pore volume, CO<sub>2</sub> adsorption capacity, Péclet number, and microfracture structures on CO<sub>2</sub> displacement behaviors are investigated. Results reveal two primary oil recovery mechanisms: surface adsorption-diffusion and bulk displacement-diffusion, whose dominance depends on flow and adsorption conditions. Strong adsorption capacity enhances recovery in enclosed pores via surface adsorption-diffusion but slows overall breakthrough. Low Péclet numbers yield uniform fronts, while high values result in preferential channelized flow and residual oil. Microfractures accelerate early-stage recovery via preferential channelized flow but reduce long-term efficiency due to cross-flow within the preferential channel. This study provides new mechanistic insights for optimizing CO<sub>2</sub> injection strategies in shale reservoirs to simultaneously enhance oil recovery and CO<sub>2</sub> storage.