After decades of growing globalisation, economic integration and supply outsourcing, the world is now undergoing a reversal. Amidst growing geopolitical tensions, countries sense the vulnerability created by today’s highly-concentrated supply chains, and are increasingly emphasizing strategic autonomy, supply diversification and domestic stockpiling of key resources, such as critical minerals, rare earths and oil, to reduce their vulnerability to global supply shocks.
The concentration of critical minerals
While countries like China and Japan have been stockpiling critical minerals since the 1980s, other parts of the world, including Europe and the US, have been lagging behind. Consequently, China currently holds a dominant position in the global supply of critical minerals, controlling up to 60% of raw minerals and 90% of refined minerals and rare earths including lithium, aluminum, graphite and cobalt. Amidst rising trade tensions with the US, China mobilized this dominance as a geopolitical weapon, imposing export controls in 2025 on several critical minerals and rare earths essential for semiconductor and battery production. This has generated supply uncertainty across the world, as these minerals are critical components of modern societies due to their use in renewable energy technologies, semiconductors, defense equipment and cars. Moreover, this supply chokehold comes at a time when the emergence of Generative Artificial Intelligence, coupled with the accelerated transition to mineral-intense renewables as part of climate change mitigating efforts, has drastically raised the demand for critical minerals.
Re-shoring production
Thus, countries are seeking alternative supply routes to reduce vulnerability to geopolitical tensions that jeopardise economic and national security, and are building up national stockpiles. For example, the EU’s Readiness 2030 strategy has the stated aim of enhancing strategic autonomy and reduce military dependence on the US, and enhance its deterrence capacity amidst the Russian war in Ukraine by building up continental defence production, and enhancing regional mineral industries to provide at least 10% of the bloc’s extraction and 40% of its processing of critical minerals under the EU Critical Raw Materials Act. This Act also caps the EU’s reliance on third-country suppliers at 65% for critical minerals.
A global resource scramble
Similarly, Japan has since 2020 ordered the Japan Oil, Gas and Metals National Corporation (JOGMEC) to build up rare metal reserves to cover the country’s supply for up to 180 days since the supply shocks created by the COVID-19 pandemic. Meanwhile, China has for the last decade been expanding its Belt and Road Initiative, an infrastructure project spanning across multiple African countries housing significant critical minerals reserves, in order to secure its supply of minerals like aluminum, zinc, copper and nickel. Likewise, Europe, the US and China are scrambling to secure bilateral trade deals with African and Latin American countries like Zimbabwe, the Democratic Republic of Congo, Chile and Brazil under multilateral frameworks like the G7 and G20. Moreover, the US launched Project Vault at the beginning of 2026, investing $12 billion to build up a national critical minerals reserve.
Ongoing dependence on oil
The stockpiling of oil is less novel. Since Iran closed the Strait of Hormuz at the beginning of the year, effectively cutting off 20% of global oil and gas trade, the world has undergone an unprecedented energy shock. This has led the International Energy Agency to release emergency oil stocks established in the wake of the severe 1973 oil crisis, and which it has activated in past geopolitical turmoil including the 2011 Civil War in Libya and the Russian invasion of Ukraine in 2022. However, the current oil crisis is much more severe, meaning that the 400 million barrels of oil released by the Agency from the emergency stockpile covers less than half of the shortage as global energy supplies remain highly concentrated, despite diversification efforts. For example, Europe has for the last decade with the rising tensions between Ukraine and Russia sought to reduce its reliance on imports of Russian oil and natural gas, announcing plans in 2025 to phase out all imports of Russian energy and substitute it with Norwegian and US imports. However, even as the EU is expanding its use of renewable energy, oil demand remains high, accounting for over one-third of the region’s energy supply. In addition, amidst deteriorating transatlantic relations and Trump’s tariff war, reliance on US oil is becoming increasingly unattractive. Hence, the EU’s need for oil stockpiling remains high to secure its economy against future geopolitical risks. Similarly, Asian countries like India, Singapore and Pakistan, which are heavily dependent on the now disrupted oil production of the Middle East, have since the start of the Iran War announced intentions of increasing their domestic oil stocks to up to 500 million barrels to cushion their economies against future shocks.
Resource security dilemma
However, as demand rises with the expansion of AI and the nearing of emissions reduction deadlines, the world might be running the risk of creating a self-fulfilling prophecy of supply disruption. As countries hoard national stockpiles of minerals out of fear of strategic vulnerability and supply insecurity, competition and rivalry for these resources grows, in effect exacerbating global tensions and supply insecurity. Hence, the world might be trapping itself in a resource security dilemma as they try to tackle the perfect storm unleashed as the long trend toward the concentration and offshoring of supply chains to the cheapest producer with little concern for strategic autonomy, meets increasing demand, and an uncertain geopolitical landscape.
