You have watched for nearly a month as oil markets have fluctuated wildly in response to optimistic or pessimistic signs from the war between the Israeli and American alliance and Iran. With few conventional weapons that can threaten Israel, and even fewer that can threaten the United States, Iran has used its control of the Strait of Hormuz—through which 20% of global petroleum liquids consumption travels—as a weapon of war. Strangling the flow of oil to the world puts pressure on the United States to quickly wrap up operations as trade partners and allies beg for relief.
In The Wall Street Journal, Georgi Kantchev and Jon Emont explain that the Iranians’ use of oil as a weapon is in line with a recent, more frequent pattern of using trade as a weapon. They point to China’s use of rare earth minerals and the United States’s use of limits on chip exports as other instances in which trade has been weaponized. They write:
Iran’s move to choke off the Strait of Hormuz and turn crude oil into a weapon of war marks a new phase in the 21st-century competition for global power—one that will be defined by the control of critical raw materials and energy.
In the face of a withering campaign of airstrikes by the U.S. and Israel, Tehran has launched an asymmetric counterattack, using energy supplies as a cudgel on a scale unseen in decades.
The United States itself is somewhat insulated from oil disruptions, as it produces about as much as it consumes. But European and Asian allies, as well as major trade partners like China, depend heavily on energy flows out of the Persian Gulf, and the disruptions are causing diplomatic backlash.
Rare earth metals pose a greater risk for the United States. China has a near monopoly on the metals that have become vital for advanced technologies, including defense tech. To combat China’s stranglehold over rare earths, the Trump administration has invested directly in companies planning to produce them. Those investments include $1.4 billion in MP Materials, operators of the Mountain Pass Rare Earth Mine and Processing Facility. 60 Minutes explains the mine’s revival:
Mountain Pass, California, once led the world in rare earth production. But as mining and processing shifted to China, the mine shut down. Years later, a hedge fund manager saw a chance to revive it. https://t.co/gyc9jVKAsO pic.twitter.com/koWC6zhTH6
— 60 Minutes (@60Minutes) March 22, 2026
Action Line: For investors, resources used as weapons or leverage in geopolitical conflicts add volatility and uncertainty. Owning a diversified portfolio of stocks and bonds is one way to reduce risk. Harry Markowitz called it “the only free lunch in investing.” When you want to talk about a diversified portfolio of individual securities, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive and Thrive letter.
