Silver and crude oil prices reverse, stemming from two structural changes in China

In the international commodities market in 2025, the rise in precious metals and the decline in oil prices have attracted significant attention. A symbolic event is that the price of silver per standard unit has surpassed the price of oil for the first time since 1980, marking a 44-year gap. This historic “reversal” reflects two structural changes: China’s accelerated decarbonization trend and the long-term risk of domestic economic deflation.

In mid-December, a report by renowned strategist Michael Hartnett from BofA Securities sparked widespread discussion among market participants. The chart he focused on was the “oil and silver price ratio.” Calculated by dividing the price of 1 barrel of oil by the price of 1 ounce of silver, this ratio has remained below 1 since December began. Excluding anomalies during the COVID-19 pandemic, the significant reversal in prices between the two is the first since 1980.

On December 24, the London spot price for silver, as the White Silver International Indicator, rose to $72 per ounce, setting a new all-time high. This represents an increase of 2.5 times compared to the end of 2024. Regarding crude oil, the US West Texas Intermediate (WTI) futures price fell below $55 per barrel in mid-December, reaching the lowest point in approximately 4 years and 10 months. A simple calculation shows that about 31 grams of silver can buy one barrel of crude oil.

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