As Gold Rises and Silver Surges, Will Oil See a Major Rally in 2026?

TradingKey - In 2026, a grand year of technological and geopolitical shifts, global commodities are undergoing a profound "repricing" transformation. The epic surge in gold and silver has already begun, while oil, the "mother of all commodities," may be in the calm before the storm.

The Battle for Oil Pricing Power

After the U.S. dollar hegemony failed to exert sustained global suppression through a high-interest-rate "capital grab," the U.S. is gradually shifting its strategic focus to oil, hoping to consolidate its global influence through energy leverage. Recently, Trump made high-profile claims about wanting to "control 55% of the world's oil." While hyperbolic, these remarks reveal the true intention of the U.S. to seek oil dominance. The U.S. objectives can be analyzed in three layers, from shallow to deep:

First, to maximize oil sales revenue to offset its massive fiscal deficit; second, to maintain the "petrodollar" settlement framework and stabilize the dollar's global payment status; and finally, at a deeper level, to use vast oil reserves and resources as underlying assets for the dollar, providing a physical anchor for U.S. Treasuries and dollar credit, thereby stabilizing the bedrock of its financial system.

In this process, the core issue in the oil market remains: who holds the pricing power.

This three-way game surrounding oil spans three levels: dollar-based pricing, supply-demand structures, and geofinance. The core participants are the U.S. (oil-finance hegemon), OPEC+ (the supply-side alliance), and emerging consuming nations (particularly China and India).

Over the past decade, the U.S. leveraged the shale revolution to boost domestic crude production, successfully curbing OPEC's price leadership and becoming a pivotal force in suppressing oil prices by utilizing flexible supply and policy interventions to manage price volatility.

However, as we enter 2026, this "supply-driven strategy" is facing structural challenges, and the original oil game model is quietly evolving.

On one hand, the administrative tools the U.S. relies on—such as releasing the Strategic Petroleum Reserve (SPR) and promoting shale production—have effectively lowered prices in the past but are now reaching their limits. After years of rapid expansion, the shale industry is entering a phase of diminishing returns, with new drilling counts slowing down. Meanwhile, financial capital has entered a "period of rational scrutiny" regarding the high-cost, high-volatility energy sector, leading to a noticeable cooling of investment enthusiasm.

On the other hand, OPEC+ is no longer a loose alliance of oil producers in the traditional sense; its level of political coordination has significantly improved. Even in the face of cyclical supply-demand imbalances, OPEC+ has demonstrated stronger resolve in production cuts, signaling that they are actively reclaiming pricing discourse through output controls.

This may also mean that "oil pricing power" is gradually shifting from financial markets back to the upstream supply side. When the U.S. finds that its traditional means—such as releasing inventories, increasing supply, or administrative intervention—can no longer exert sustainable pressure on oil prices, its dominance in the global energy system will inevitably be challenged.

The Impact of Escalating Geopolitical Risks on the Oil Market

At the beginning of 2026, the global crude market is experiencing a concentrated amplification of a new round of geopolitical risks. Instability factors in several key regions continue to be released, significantly disrupting crude supply-demand expectations and pushing up market risk premiums.

In the Middle East, tensions between Iran and Western nations have escalated further. Since the outbreak of the "12-Day War" in 2025, U.S.-Iran conflicts have not eased but have instead intensified. The U.S. has repeatedly issued public warnings that it does not rule out military strikes against Iran to curb its nuclear program, while Israel's stance has grown increasingly hawkish, frequently issuing strong deterrent signals.

Against this backdrop, the Strait of Hormuz—one of the world's most critical oil transport routes—has been placed at high risk. As long as there is a potential for blockades or conflict in this passage, the stability of global oil supplies cannot be guaranteed.

Meanwhile, the Russia-Ukraine conflict has entered its fifth year, and Western restrictions on Russian energy exports remain strict. Constrained by the sanctions environment, the scale and direction of Russia's energy exports continue to shrink. This has significantly increased global market dependence on non-Russian producers such as Saudi Arabia, Iraq, the UAE, and the U.S. In this context, any volatility in major producing nations outside of OPEC+ will have a material impact on crude prices.

Previously, the U.S. took an unprecedented hardline stance toward Venezuelan President Maduro, including legal sanctions and even substantial diplomatic intervention. The U.S. deliberate suppression of Venezuela is ostensibly to "uphold democracy," but in reality, it aims to gain dominance over heavy oil supplies in Latin America and cut off asymmetric competitors' access to cheap energy. Its crude production and export capabilities face severe challenges.

Will Oil See a Catch-up Rally in the Commodity Cycle?

Entering 2026, global commodity markets continue to heat up. Metals, precious metals, and some agricultural products have generally risen, forming a collective upward trend. Gold has broken the $5,600 mark, silver has staged a strong rebound, and industrial metals like copper and aluminum are rising rapidly, driven by the wave of investment in AI infrastructure. Against the backdrop of this comprehensive commodity revaluation, whether oil—a central asset in the inflation cycle—will also see a price catch-up has become a focus of market attention.

First, it must be noted that as one of the world's largest and most liquid commodities, oil price volatility is driven not only by supply and demand but also directly by changes in the global credit and monetary pricing systems.

On one hand, the surge in commodities reflects an accelerating trend of "monetary value repricing." Weakening confidence in U.S. dollar credit has led to a systemic rise in dollar-denominated core assets. When gold's ascent reflects not just safe-haven demand but also market expectations of declining dollar purchasing power, physical assets like oil naturally possess the momentum for repricing. In a sense, oil isn't getting more expensive; rather, the currency is continuously devaluing.

On the other hand, the overall upward shift in commodity costs is also transmitting to the energy industry itself. From upstream exploration to midstream transport and storage, the oil industry chain relies heavily on raw materials like aluminum, steel, and copper. Once industrial metal prices continue to rise, they significantly push up the total costs of the entire oil production system. These increased expenses are gradually passed through pricing mechanisms, eventually forming "incompressible" rigid support for refined product prices.

Of course, the U.S. still attempts to dominate oil price trends through various means. From utilizing the Strategic Petroleum Reserve and strengthening sanctions on countries like Iran and Venezuela to working with allies to pressure OPEC+ for production increases, administrative and diplomatic tools are intermingled. Although these methods have worked in the short term in the past, historical experience shows that administrative intervention can only delay the true market price reaction and cannot fundamentally alter the logic behind supply, demand, and valuation.

Conclusion

If the theme of the oil market in 2024 and 2025 was still the traditional supply-demand game, then 2026 has entered a stage of deeper confrontation between energy sovereignty and financial hegemony.

As Global South nations gradually awaken, more resource-exporting countries are pursuing their own pricing power, creating systemic divergences from the petrodollar system. Meanwhile, amid the global credit revaluation, safe-haven capital is increasingly inclined to flow into physical assets. In this structural shift, oil may officially take the baton from gold in the second half of the year, initiating a catch-up rally triggered by long-term undervaluation.

However, as we have emphasized many times in the past, international energy markets naturally possess high sensitivity and structural instability. Therefore, for all market participants, in this new stage of the commodity cycle, oil could represent an opportunity for revaluation or become a highly sensitive "landmine" amid changing circumstances. Accuracy in perception and timely risk management are becoming the top priorities for trading decisions in 2026.