(Source: "Petroleum Business Daily" 2026-02-15)
Dong Xiucheng
The current international 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 basic factors of currency, supply and production capacity that truly determine the underlying pricing logic of oil prices.
The US dollar 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's 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, which will push up oil prices.
“OPEC+”: Fragile production reduction alliance
As one of the world's largest organizations of petroleum exporting countries, "OPEC+" 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 major oil-producing countries 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 focuses more on market share and oil export revenue. This difference makes the synergy among "OPEC+" members limited, and some oil-producing countries may privately increase production in pursuit of higher profits, thus undermining the effect of the production reduction agreement and leading to global oil supply excess. Although "OPEC+" has adopted a production reduction agreement to support oil prices, the general trend of global oversupply has not been 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 production increase plans by other oil-producing countries around the world.
U.S. 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. 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 will help relieve the pressure of tight global oil supply and stabilize market prices. It may also lead to an oversupply situation in the market, which in turn will trigger oil price fluctuations or even declines.
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 significant geopolitical competition and gaming. Any events such as regional conflicts, terrorist activities or political unrest may cause disruption or reduction in the crude oil supply chain and thereby push 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, risk premiums began to fall back as indirect negotiations between the United States and Iran resumed. Despite this, the situation in the Middle East is still full of uncertainty, and emergencies may still occur in the future that will cause oil prices to surge again. In addition, the confrontational relationship between the United States and Iran has not been fundamentally eased, and military actions or diplomatic statements by either party may cause market sentiment to fluctuate and thus affect 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 determining 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.
（The author is a professor at the w88 casino of International Business and Economics, w88 casino）
