The war in the Middle East is causing rapidly depleting US reserves of critical raw materials, according to Realtid. Chinese sources assess US rare earth metal reserves will last at most two more months before shortages occur, the outlet reports. Critical minerals are foundational to advanced technologies and defense systems, with supply chains concentrated in China, research from nine sources indicates. China has weaponized export restrictions, including new controls on rare earths and permanent magnets using a foreign direct product rule-like mechanism, affecting defense and semiconductor industries, according to the same research. This dual pressure from conflict and export controls has created an unprecedented squeeze on materials essential for everything from electric vehicles to military hardware.
Tungsten has increased nearly 557% in price over one year by the war's start, Realtid reports. Ammonium paratungstate prices rose from under $400 to over $2,200 per ton in one year, entering a 'parabolic phase,' the outlet states. Tungsten's price performance surpasses gold and oil, according to Andy Home for Mining.com via Realtid. This dramatic surge reflects not only immediate war impacts but also underlying market tightness, with tungsten being critical for industrial cutting tools, aerospace components, and electronics. The price spike has forced manufacturers to seek alternatives or absorb higher costs, disrupting production schedules across multiple sectors.
China produces about 80% of global mining output, multiple reports indicate. Since February 2025 export restrictions, Chinese export volumes fell nearly 40%, while domestic consumption increased, sources said. This shift has redirected critical minerals toward China's own industries, leaving international buyers scrambling for limited supplies. The restrictions target rare earth elements and permanent magnets, which are vital for renewable energy technologies, electric motors, and defense applications, amplifying the global shortage.
The U.S. is vulnerable to disruptions in critical mineral supply chains, with limited short-term resilience despite policy efforts, research from nine sources confirms. The precise timeline for U.S. rare earth metal shortages remains unclear, given varying assessments. Efforts to diversify supply through domestic mining and partnerships with allies have been slow to materialize, leaving the U.S. dependent on imports that are now under threat. This vulnerability extends to defense systems, where rare earths are used in guidance systems, communications equipment, and other advanced technologies.
A U.S.-Israeli military conflict with Iran has disrupted the Strait of Hormuz, a chokepoint for about 20% of global oil consumption and 20% of LNG exports, according to research from nine sources. The disruption of the Strait of Hormuz is causing oil price volatility and potential stagflationary shocks, the research states. The specific economic impact scenarios and stagflationary shock magnitudes from the Strait of Hormuz disruption have not been detailed. This maritime blockage has halted shipments from key producers like Saudi Arabia and Qatar, leading to immediate supply shortfalls and price spikes in global energy markets.
The European Union is considering releasing strategic oil reserves in response to the disruption, research from nine sources indicates. The effectiveness of EU strategic oil reserve releases in mitigating price volatility is yet to be determined. Such measures aim to cushion the blow for consumers and industries, but analysts warn that reserves are limited and may not address long-term supply issues if the conflict persists. Other nations, including the U.S. and Japan, are also evaluating similar actions to stabilize markets.
The conflict is framed as part of broader U.S.-China rivalry, with implications for global energy security and inflation, according to research from nine sources. The full extent of China's weaponization of export restrictions on global supply chains continues to unfold. This geopolitical dimension adds complexity, as China may leverage its mineral dominance to gain strategic advantages, while the U.S. seeks to counter through alliances and innovation. The rivalry risks fragmenting global trade and accelerating decoupling in critical sectors.
Historical supply chain vulnerabilities have been exacerbated by recent escalation, though the exact duration and escalation level of the U.S.-Israeli military conflict with Iran remains uncertain. Past disruptions, such as the COVID-19 pandemic and trade tensions, highlighted weaknesses in just-in-time logistics, but the current crisis is more severe due to its combined military and economic dimensions. Industry and defense sectors are reacting to the compounded pressures on critical materials and energy markets, with companies stockpiling where possible and governments fast-tracking contingency plans. Implications for global inflation and economic stability are growing as the crisis deepens, with rising costs for energy and raw materials threatening to slow growth and increase unemployment worldwide. Potential policy responses and long-term strategic considerations are being debated amid the unfolding disruption, including investments in alternative supply sources, recycling technologies, and strategic reserves to build resilience against future shocks.