---
title: 'The Shift in Global Power as Rare Earth Minerals Become the New Oil'
url: 'https://thediplomaticinsight.com/shift-in-global-power-rare-earths-new-oil/'
author: 'Rishma Waqas'
date: '2026-02-02T13:57:05+05:00'
categories:
  - 'OpEd'
---

# The Shift in Global Power as Rare Earth Minerals Become the New Oil

For more than a century, global power has been closely linked to control of fossil fuels, particularly petroleum. The 20th century was largely shaped by oil. The phrase “oil is power” became a geopolitical axiom. The 1973 oil embargo demonstrated how energy resources could be weaponized to gain political ends. In the 21st century, the transition toward renewable energy and advanced digital technology is shifting the epicenter from oil to rare earth minerals. This transition is not just an energy revolution; it is likely to redraw global power dynamics. Nations that master rare earth mining, processing and manufacturing will likely dominate the global economy.

Rare earth minerals are important because of their irreplaceable role in advanced technology; they are critical components in electric vehicles, renewable energy systems, military equipment, and green technology. As the world pursues decarbonization through initiatives such as the Paris Agreement, demand for these materials is rapidly increasing. According to the International Energy Agency (IEA), demand for rare earth minerals is expected to increase three to six times by 2040. This demand is setting the stage for a new era of global resource competition.

To understand the importance of shifting toward rare earth minerals, we must understand how petroleum shaped the modern world. In the 20th century, petroleum powered the Second Industrial Revolution by fueling automobiles, ships, and aircraft; transforming economies worldwide. World War II was fought with oil-powered machines, and nations that secured reliable fuel supplies gained a decisive advantage. After World War II, oil became central to global economic growth.

**Read More: [The Role of Pakistan as Rare Earth Minerals Redraw Global Power Politics](https://thediplomaticinsight.com/role-of-pak-as-rems-redraw-global-power-politics/)**

In 1960, the formation of the Organization of Petroleum Exporting Countries (OPEC) marked a turning point by shifting control away from Western oil companies toward producer states. The oil-based world order created a distinct form of strategic influence. In some countries, it reinforced authoritarian regimes and contributed to “resource curse.” It drew Western powers into complex Middle Eastern relationships that balanced human rights concerns against energy needs. It also created enormous financial power, enabling oil-rich countries to become major global investors. But the growing threat of climate change and carbon emissions is shifting global focus toward green energy.

The world’s rare earth minerals have become the “vitamins” of modern technology. They are a group of 17 metallic elements, including 15 lanthanides plus scandium and yttrium. They are relatively abundant in the Earth’s crust, but rarely found in high concentrations. Their unique magnetic, luminescent, and electrochemical properties make them irreplaceable in high-tech applications.

Strategic vulnerability arises because converting ore into usable rare earth metals is a long, complex, and environmentally hazardous process. The ores mostly contain radioactive thorium and uranium, and the separation process uses large quantities of chemicals. According to the US Geological Survey, China is dominating rare earth minerals, accounting for a major share of global mining and most refining capacity, because China invested in mining and mastered extraction in the 1980s. It controls much of the value chain from mining to manufacturing.

During a maritime dispute with Japan in 2010, China restricted rare earth exports, resulting in sharp price spikes and panic in technology and defense industries worldwide. China has signaled that it can use this dominance as a strategic tool. Moreover, during recent United States-China trade tensions, rare earth minerals emerged as a potential pressure point in negotiations.

**Read More: [US, China Outline Framework to Ease Tariff and Rare Earth Minerals Tensions](https://thediplomaticinsight.com/us-china-ease-tariff-rare-earth-tensions/)**

To counter this, many countries started to take initiative in rare earth minerals. The United States has established the Minerals Security Partnership (MSP) with allies to build alternative supply chains. The European Union has passed legislation such as the Critical Raw Materials Act to secure its own supply chains.

However, the shift from oil to rare earth minerals will reshape the contours of global power. In the 21st century, power will belong to those who control the technology to transform these resources into high-performance material. If any nation possesses vast rare earth deposits but lacks expertise in chemical engineering or manufacturing, it will remain a raw material supplier in a low-margin segment of the value chain.

The dominance in Artificial Intelligence (AI), quantum computing, and next-generation communication like 6G will depend on hardware that is built with rare earth minerals. Modern defense technologies such as the F-35 fighter jet, Virginia-class submarines, Javelin missiles and drone swarms depend on rare earth minerals like magnets, phosphors and alloys. Therefore, this new transition is making a new kind of geopolitical alignment and tensions.

Countries that are believed to have significant rare earth reserves have attracted interest from China, Europe, and the United States. Countries are navigating this complex landscape by securing access to rare earth resources, investing in processing and manufacturing, and innovation. These efforts are creating new dependencies as well as conflicts, and will shape the 21st century world order by leading in industries of the future.

 

 

**The views presented in this article are the author’s own and do not necessarily reflect the views of The Diplomatic Insight.*