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

In the international commodities market in 2025, rising precious metals prices and falling crude oil prices are drawing attention. A symbolic event is that silver’s price per troy ounce first surpassed the crude oil price in 44 years—since 1980. The historic “reversal drama” reflects two structural changes. This is the direction of China’s accelerating decarbonization and the long-term risk of domestic economic deflation.

In mid-December, a report by the well-known strategist Michael Hartnett of Bank of America Securities (BofA Securities) sparked heated discussion among market participants. The chart he focused on was the “ratio of crude oil and silver prices.” Calculated by dividing the price of 1 barrel of crude oil by the price of 1 ounce of silver, the ratio has remained below 1 since December. Aside from the abnormal value seen during the COVID-19 period, the clear reversal in the prices of the two assets is the first time since 1980.

On December 24, the London spot price—which serves as an indicator for silver—rose to $72 per ounce, setting a new all-time high. Compared with the end of 2024, it has risen 2.5 times. Looking at crude oil, U.S. West Texas Intermediate (WTI) futures prices broke below $55 per barrel in mid-December, reaching the lowest point in about 4 years and 10 months. With a simple calculation, a silver coin of around 31 grams can buy 1 barrel of crude oil.

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