For the last century, the concentration of resources and political-economic domination was dictated by the availability of hydrocarbons. Ensuring the continuous flow of the lifeblood of the world economy was the objective of state foreign policy, securing oil fields, sea routes for tankers, and diplomatic relations with petroleum-producing countries. But already in 2026, the global energy transition has begun, turning the traditional understanding of resource politics upside down. Now, to produce electricity using renewable sources, to store it in large-scale battery systems, and to use it in electric vehicles instead of internal combustion engines, one needs not oil and gas resources, but lithium, copper, cobalt, nickel, and rare earth metals (REE).

A shift from a fuel-based to a metal-based energy system has begun, with profound geopolitical consequences. While previously in the energy sector, natural resources were used up and consumed in the process of production, now metal ores must be mined and processed into long-lasting products such as accumulators or special alloys. In turn, this has had a dramatic impact on the balance of international relations, as the resource base of the new energy system is extremely narrowly focused, while the supply chains for this resource are becoming more fragile and vulnerable to disruptions. The competition for metals between different countries will be strategically significant.

Demand Supercycle and Extreme Supply Concentration

The huge demand for metals to support decarbonization, especially during the 2024-2040 period, will have huge implications for commodities markets. According to UN forecasts, the world’s demand for lithium is expected to increase by 353% between 2024 and 2040, driven primarily by the need to produce electric vehicles (EVs) and battery storage facilities for the electricity grid. At the same time, the supply of critical minerals is extremely concentrated, with particular significance for the reserves of cobalt, with China controlling approximately 70% of the world’s supply. Other metals, such as lithium, are concentrated in Australia and South America in the Lithium Triangle.

Meanwhile, the least diversified link in the supply chain is processing, in which ore is subjected to chemical refining to produce battery-grade or magnet-grade metals. This process is currently concentrated in China, which controls 91% of global rare earth refining and 92% of rare earth magnet production. As a result, critical infrastructure such as data centers, electric cars, and military equipment for Western countries directly depends on a single supplier, which creates significant risks for global security.

Export Controls and Price Volatility

The resource base of the new energy system has created unprecedented opportunities for political and economic manipulation through control of the supply chains. During the period 2020-2026, governments around the world introduced nearly a hundred new measures to regulate the trade of critical minerals. The result of this protectionism has been significant price fluctuations for many commodities. For example, in 2025, the price of cobalt jumped by about 130% at the beginning of the year due to restrictive DRC export policies. At the same time, prices for copper, aluminum, and other metals increased by about a third.

At the same time, the rush for critical minerals has had other consequences, such as the imposition of restrictions on industrial chemicals necessary for processing. In May 2026, China temporarily banned the export of sulfuric acid, an essential component in the production of copper, lithium, cobalt, and rare earth metals. This had a devastating effect on the world’s mining industry, as the price of sulfuric acid itself increased fivefold. As a result, the cost of acid exceeded the cost of energy, becoming the determining factor in the profitability of mining.

Critical Infrastructure and Chokepoints of the New Energy

The vulnerability of the supply chain for critical minerals is intertwined with the key traditional geopolitical fault lines. The attack on the Strait of Hormuz in the Persian Gulf in February 2026, which was initially associated with a threat to oil supplies, was much more serious for the new energy system. Due to the high concentration of sulfur traffic in the Persian Gulf, an attack on this infrastructure led to a disruption of mineral refining processes in all countries around the world. As a result, the price of sulfur skyrocketed, posing a serious threat to the transition to a new energy system. This episode highlighted how the energy transition creates new dependencies on traditional geopolitics, including sea transport as a vital link in the supply chain of critical minerals.

Supply Chain Primary Geopolitical Risk Real-World Impact Stage Vector (2025-2026)

Extraction / Sovereign export bans and DRC cobalt export Mining resource nationalism to force restrictions drove global

domestic processing. cobalt prices up by ~130%.

Chemical Disruption of precursor Strait of Hormuz closure and Feedstocks materials (e.g., sulfur) due to Chinese export curbs spiked

maritime conflict or trade sulfuric acid costs. curbs.

Refining / Monopolistic market control Highly concentrated refining Processing utilized for political leverage capacity creates structural

or retaliation. reliance on Chinese output. End-Use Lack of domestic Western aerospace and Manufacturing manufacturing capacity for defense sectors remain

specialized components (e.g., heavily dependent on permanent magnets). imported rare earth magnets.

Resilience Efforts and “Friend-Shoring”

The resource security dilemma of the new energy system has forced the world’s largest economies to respond, restructuring international trade relations. In parallel with calls for free trade (multilateralism), countries are beginning to develop exclusive supply chains of critical minerals and related technologies. In 2022, countries adopted 58 critical mineral alliances, including two major international agreements – the EU-Japan Alliance for Sustainable Critical

Raw Materials and the US-Australia Pact for Critical Minerals. Such projects are examples of

the growing trend of “friend-shoring” in the global critical resource sector.

At the same time, in December 2025, in New York, the United Nations (UN) held an official meeting of the Task Force on Critical Energy Transition Minerals, which was formed to help developing countries realize the benefits of this emerging critical resource sector. While the UN wants to create a unified approach to managing the rapid rise in demand for critical minerals, countries such as China are promoting a policy of “friend-shoring,” and countries like the US are pursuing a more protectionist strategy.

Outlook

The concentration of resources and the associated political and economic struggles will continue to shape the geopolitical landscape of the 21st century. The transition to a new energy system will be accompanied by a new round of competition between states for control of refining infrastructure, with export restrictions and trade wars erupting periodically. The ability of governments to ensure the continuous supply of critical minerals to their industries will be based on the ability to organize their own processing infrastructure rather than on the availability of resources in the ground.

Sources & Citations

  • "Global Critical Minerals Outlook 2026," International Energy Agency (IEA) (May 2026).
  • "The Shifting Dynamics of Critical Minerals Trade," UN Trade and Development (UNCTAD) Global Trade Update (June 2026).
  • "Critical Minerals and the New Geopolitics of the Green Transition," FREE Network Policy Briefs (April 2026).
  • "The Growing Demand for Critical Minerals," J.P. Morgan Global Research (February 2026).