(Source:《China Petroleum Enterprise》 2026-02-08）
Dong Xiucheng
The current oil price situation is a complex system intertwined with multiple factors, in which the U.S. dollar (currency), OPEC+ (supply), U.S. shale oil (capacity checks and balances), and geopolitical factors in the Middle East constitute the main four-party game players. Under the interaction of these four, oil prices show the characteristics of frequent fluctuations and complex trends. It is worth noting that although geopolitical factors can amplify oil price fluctuations in the short term, it is still the three more basic factors of currency, supply and production capacity that truly determine the underlying pricing logic of oil prices.
Core Overview
In the current global economic system, oil prices are undoubtedly an important indicator that affects people's hearts. Its price is not only related to energy security and economic development, but also the focus of international political struggle. In recent years, with the changes in the global political and economic landscape, oil price fluctuations have become more frequent and violent, and the interest games involved behind them have become increasingly complex. As the world's most important reserve currency and trading currency, the U.S. dollar plays a pivotal role in the formation of oil prices. The establishment of the petrodollar system makes crude oil prices denominated in US dollars, so fluctuations in the US dollar exchange rate directly affect the rise and fall of oil prices. When the U.S. dollar appreciates, crude oil priced in U.S. dollars is relatively cheaper and demand increases, thereby pushing up oil prices; conversely, a depreciating U.S. dollar causes oil prices to fall.
OPEC+ is the world's largest Organization of Petroleum Exporting Countries, and its production policies and production reduction agreements have an important impact on oil prices. OPEC+ coordinates the oil production of member countries to balance market supply and demand, thereby affecting oil price trends. When OPEC+ decides to cut production, market supply decreases and oil prices tend to rise; increasing production may cause oil prices to fall. However, there are constant disputes over the interests of OPEC+ members, and the implementation of its production reduction agreement has been repeatedly questioned, which makes the role of OPEC+ in the formation of oil prices full of uncertainty.
As an emerging oil production force, the rapid development of U.S. shale oil has had a profound impact on the global oil market. The flexibility and cost advantages of shale oil production allow the United States to rapidly increase or decrease oil production in a short period of time, thereby affecting the global oil supply and demand balance. When shale oil production increases, the market is well supplied and oil prices may fall; while a decrease in shale oil production may cause oil prices to rise. In addition, with the continuous advancement of technology and reduction of costs, shale oil is expected to continue to expand production capacity in the future, which will have a greater impact on oil prices. Geopolitical factors in the Middle East have always been one of the important factors affecting oil prices. The Middle East is one of the most important oil-producing regions in the world, with abundant oil resources and a complex geopolitical environment. Regional conflicts, terrorist activities, and political unrest may lead to interruptions or reductions in oil supply, thereby pushing up oil prices. In addition, the stability of the Middle East is directly related to the confidence and expectations of the global oil market. To sum up, behind the fluctuations in oil prices is the intertwined game of multiple factors such as the currency status of the U.S. dollar, OPEC+ production policy, U.S. shale oil production capacity, and Middle East geopolitics. These factors interact and influence each other, jointly determining the trend and fluctuation range of oil prices.
Four core influence logic
01 USD and the Federal Reserve
Under the petrodollar system, the strength of the U.S. dollar is inversely linked to the rise and fall of oil prices. When the U.S. dollar index rises, the price of crude oil in U.S. dollars falls relatively, and vice versa. This law mainly stems from the status of the US dollar as an international currency and its role in the global financial system. Recently, the news that Trump nominated Warsh as chairman of the Federal Reserve has triggered the market's attention on the future direction of monetary policy. Warsh is one of the hawks whose appointment may lead the Fed to maintain higher interest rates and delay plans to cut interest rates. This policy orientation will have a supporting effect on the US dollar exchange rate, thereby suppressing the rise in oil prices. According to historical experience, in a high interest rate environment, investors are more inclined to hold U.S. dollar assets to obtain higher returns, leading to increased demand for U.S. dollars and an increase in the exchange rate. At the same time, high interest rates will also inhibit the growth of crude oil demand and further promote the decline of oil prices.
However, the Fed's monetary policy is not static. As the global economic situation changes and market expectations adjust, the Federal Reserve may adjust its monetary policy in a timely manner to adapt to the new economic environment. If the Federal Reserve begins to cut interest rates or slow down the pace of interest rate increases, the dollar exchange rate may be suppressed and depreciate. This will increase the attractiveness of dollar-denominated crude oil and push oil prices higher.
02OPEC+: Fragile production reduction alliance
OPEC+, as one of the world's largest organizations of petroleum exporting countries, has been working hard to balance market supply and demand by coordinating the oil production of member countries. However, there are many contradictions and differences within the organization, which makes the implementation of its production reduction agreement not easy. Saudi Arabia and Russia are the two largest oil producers in OPEC+, but they have significant differences in oil production policies and economic interests. Saudi Arabia hopes to increase fiscal revenue and promote energy transition by maintaining high oil prices, while Russia is more focused on market share and oil export revenue. This difference puts OPEC+ under great pressure when formulating and implementing the production reduction agreement, and the synergy among member countries is limited. Some oil-producing countries may privately increase production in pursuit of higher profits, thereby undermining the effectiveness of the production reduction agreement and leading to a global oil supply glut. Although OPEC+ has adopted a production reduction agreement to support oil prices, the general trend of global oversupply has not fundamentally changed. According to early warning information from the IEA and other institutions, the global oil supply surplus in 2026 will be approximately 3.8 million barrels per day. This means that even if OPEC+ continues its production reduction agreement, its influence may be offset by plans to increase production by other oil-producing countries around the world. Therefore, OPEC+ can maintain oil price stability in the short term, but in the long term, the intensity of its production cuts will determine the tightness of global supply and may trigger oil price fluctuations.
03 US shale oil: a balancing force that breaks the old pattern
The rapid development of U.S. shale oil has changed the original pattern of the global oil market. Due to its low production costs and high elasticity of production growth, shale oil has become a "disruptor" in the international oil market. U.S. shale oil producers can flexibly adjust production scale and product types according to market conditions to meet changes in market demand. In recent years, with the continuous advancement of technology and the reduction of production costs, U.S. shale oil production has shown rapid growth. This has gradually increased the position of the United States in the global oil market and challenged the dominance of OPEC+. When international oil prices rise, U.S. shale oil companies will take advantage of the opportunity to increase production to obtain higher profits; when international oil prices fall, they may also reduce production costs to maintain market share. The massive increase in U.S. shale oil production has had a major impact on the global oil supply pattern. On the one hand, it helps relieve the pressure of tight global oil supply and stabilize market prices; on the other hand, it may also lead to an oversupply situation in the market, which may lead to oil price fluctuations or even declines. Therefore, the production and sales strategy of U.S. shale oil will have an important impact on global oil prices.
04 Middle East Geopolitics: Emotional Triggers
The Middle East is not only one of the most important oil-producing regions in the world, but also one of the regions with the most intense geopolitical struggles. Any events such as regional conflicts, terrorist activities or political unrest may cause disruption or reduction in the crude oil supply chain, thereby pushing up oil prices. As one of the world's most important oil transportation channels, the Strait of Hormuz's strategic position is self-evident. If there is a conflict or blockade in the strait, the supply in the international oil market will be severely affected and trigger a short-term surge or even doubling of oil prices. However, as indirect negotiations between the United States and Iran resumed, risk premiums began to fall. Despite this, the situation in the Middle East is still full of uncertainty, and emergencies may still occur in the future, causing oil prices to surge again. In addition, the confrontational relationship between the United States and Iran still exists, and the tension between the two parties has not been fundamentally alleviated. In this context, military actions or diplomatic statements by either party may cause market sentiment to fluctuate, thereby affecting oil prices. In addition, as one of the world's important oil producers and exporters, the stability of Iran's internal political situation will also directly affect the trend of international oil prices.
Underlying Essence
From a deeper perspective, oil prices are a concentrated expression of global currency games, energy supply patterns and national strategic interests. It not only reflects the operating conditions and development trends of the global economy, but is also an important bargaining chip and result of international political struggles. In the global monetary system, the U.S. dollar, as the most important reserve currency and trading currency, plays a decisive role in the formation of oil prices. Fluctuations in the U.S. dollar exchange rate not only directly affect the price of crude oil priced in U.S. dollars, but also indirectly affect oil price trends by affecting international capital flows and market sentiment.
Changes in the energy supply pattern are also one of the important factors that determine oil prices. With global population growth, economic development and technological advancement, the global demand for energy continues to grow. The development and application of new energy sources (such as shale gas, renewable energy, etc.) have also changed the traditional energy supply pattern to a certain extent. These changes have had an important impact on oil prices. In addition, national strategic interests are also one of the key factors that determine oil prices. Governments of various countries often take into account their own economic, political and security factors when formulating energy policies. For example, some oil-producing countries may raise oil prices to increase fiscal revenue or maintain national stability; while consuming countries may lower oil prices to promote economic growth and social stability. This game of national strategic interests has undoubtedly increased the complexity and uncertainty of oil price formation. In the period of restructuring of the global order, energy has become one of the core pieces in the game between great powers. Governments and companies around the world are paying close attention to the dynamic changes in the energy market and seeking to occupy a favorable position in this field. In the future, as global energy demand continues to grow and the supply pattern continues to evolve, oil price fluctuations will continue to intensify and become one of the focuses of international political struggle. In short, the fluctuations in oil prices involve the joint action of multiple complex factors, including currency factors, supply factors, production capacity factors and geopolitical factors. These factors interact and influence each other, jointly determining the fluctuation trend and amplitude of oil prices. Therefore, we need to comprehensively and in-depth analyze these factors and pay close attention to market dynamics and policy changes in order to better understand and predict oil price trends and make wise investment decisions.
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