Heat oil in a large pot over medium heat. Add onion and sauté until soft, about 4-5 minutes.
Stir in garlic, ginger, and red curry paste, cooking until fragrant, about 1 minute.
Pour in chicken stock and bring to a simmer.
Add coconut milk, fish sauce, lime juice, and sugar. Stir to combine.
Add mushrooms and simmer for 5-7 minutes until tender.
Stir in shredded chicken and cook for another 3-4 minutes to heat through.
Season with salt to taste.
Stir in chopped cilantro just before serving.
Serve hot, garnished with more cilantro and sliced red chili if desired.