An ounce of silver now costs more than a barrel of oil

On 22 December 2025, a remarkable event occurred in global commodity markets: an ounce of silver traded at approximately $67-68 per troy ounce, surpassing the price of a barrel of West Texas Intermediate (WTI) crude oil, which was hovering around $56-57, according to reports. 

Brent crude, the international benchmark, was slightly higher at about $60-61, but the core message remained the same-one ounce of the white metal was worth more than 42 gallons of black gold.

This inversion hasn’t occurred in over four decades, with the last comparable episode tracing back to the volatile commodity boom of the late 1970s and early 1980s. Back then, a speculative frenzy briefly pushed silver prices high enough to surpass those of oil. Today, the crossover, first achieved earlier in 2025 when silver broke $54 while oil lingered in the $65-75 range, feels more structural than speculative. Analysts are calling it a "defining moment" for 2025, reflecting profound changes in how the world values energy and materials.

What’s fueling silver’s explosive rally

Silver has delivered one of its most dramatic years on record, surging roughly 127-130% year-to-date to all-time highs above $67, based on data. This outpaces gold's strong ~60-65% gain, underscoring silver's unique dual role as both a monetary hedge and an industrial powerhouse.

The rally is rooted in tight physical supply and exploding demand. Reports showed that global silver mine production has stagnated, while recycling can't bridge the gap, leading to persistent market deficits-projected at 95–149 million ounces for 2025 alone, marking a fifth straight year of shortfalls. Cumulative deficits since 2021 now exceed 800 million ounces, draining inventories to multi-decade lows.

Industrial consumption, which accounts for over 60% of demand, is the real accelerator. Silver's unmatched electrical conductivity makes it irreplaceable in green technologies:

- Solar energy: Photovoltaic panels consumed over 200 million ounces in recent years, with demand up sharply as global installations boom. Each panel uses 15-25 grams of silver, and ambitious targets (e.g., EU's 700 GW by 2030) promise sustained growth.

- Electric vehicles (EVs): A typical EV requires 25-50 grams of silver-double that of traditional cars—for batteries, electronics, and charging infrastructure. Automotive demand is forecast to grow at 3-4% annually through 2031.

- Electronics and AI: Data centers, 5G networks, and semiconductors add further pull, with AI-driven power needs amplifying usage.

In other reports, macro tailwinds have amplified the move: Federal Reserve rate-cut expectations (pricing in further easing amid cooling inflation and rising unemployment to 4.6%), a weaker U.S. dollar (down ~8–9% YTD), and safe-haven flows amid geopolitical uncertainty. Silver's addition to the U.S. critical minerals list has drawn institutional interest, viewing it as a strategic play on the energy transition.

Why oil is struggling to keep up

In stark contrast, crude oil has had a brutal 2025, with WTI down 18-20% YTD-on track for its worst annual performance since the 2020 pandemic crash. Prices dipped to near five-year lows before modest rebounds on events like U.S. sanctions on Venezuelan tankers.

The culprit? Chronic oversupply, according to experts. Non-OPEC+ producers (led by U.S. shale at a record of ~13.5–13.8 million bpd, with growth also from Brazil and Guyana) have flooded the market. OPEC+ has gradually unwound its voluntary cuts, adding hundreds of thousands of barrels daily, while global inventories are building aggressively. Crude oil inventories have risen sharply since the summer.

Demand growth has disappointed, particularly in China (despite stockpiling) and softening in Europe/U.S. amid efficiency gains and slower economic momentum. Forecasts indicate that surpluses will persist into 2026, with Brent potentially averaging $55 or lower if inventories continue to rise.

Geopolitical flare-ups provide brief lifts, but they’ve failed to reverse the downtrend in a well-supplied world.

Why this inversion matters: A window into global shifts

This silver-over-oil moment isn’t just a quirky headline - it’s a barometer for deeper transformations.

It highlights the energy transition in action: Markets are rewarding commodities tied to decarbonization (solar, EVs, renewables) while discounting legacy fossil fuels. Silver, dubbed the "new energy metal," embodies the rise of green technology, while oil grapples with peak demand narratives and abundant supply.

According to experts, the sharply compressing gold-silver ratio (down to ~70:1 from over 100:1) indicates that traders are banking on silver's industrial upside, alongside its monetary appeal, in an era of easing policy and inflation vigilance.

Historically, such extremes echo the spikes of the 1970s and 1980s, when inflation and commodity booms drove wild swings. Today’s rally feels more fundamentals-driven, but history warns of volatility - parabolic moves often precede sharp corrections.

For investors, this flips the script on commodities: What was once the "king" (oil) now lags a metal long seen as secondary. Portfolios tilted toward transition themes may benefit, but risks remain-economic slowdowns could crimp industrial demand, while OPEC+ discipline (or lack thereof) could swing oil prices.

Looking ahead: Boom, bust, or new normal?

Silver’s trajectory points higher if deficits persist and green demand accelerates-some analysts eye $70–$75 by late 2026. Yet overbought technicals and holiday-thin liquidity invite pullbacks.

Oil prices could stabilise if OPEC+ reins in output or demand surprises to the upside, but oversupply forecasts suggest prolonged pressure. Ultimately, 22 December 2025, marks more than a price crossover; it's a signal that the global economy is rewiring itself around sustainability, technology, and resilience. In this new era, an ounce of silver might just shine brighter than a barrel of oil for years to come.

Technical insights

Silver remains firmly bullish, with price hugging the upper Bollinger Band, signalling strong upside momentum but also stretched conditions. The steep slope of the bands highlights persistent buying pressure, though near-term consolidation cannot be ruled out.

On the downside, $57.00 is the first key support, followed by $50.00 and $46.93. A break below these levels would likely trigger sell-side liquidations and a deeper corrective move. Momentum remains elevated, with the RSI flat well into overbought territory, reinforcing strength but warning that upside gains may slow without a reset.

US oil remains under near-term pressure, with price trading below the $60.00–$61.10 resistance zone and capped by the upper Bollinger Band. The broader structure still indicates a corrective phase, although the selling momentum has started to slow.

On the downside, $55.40 is the key support, where a break would likely trigger sell-side liquidations. Momentum is attempting to stabilise, with the RSI rising slowly from oversold levels towards the midline, suggesting downside momentum is easing but lacking clear bullish conviction.