Posted by Frank Jacobs

https://bigthink.com/strange-maps/the-strait-of-hormuz-is-todays-energy-chokepoint-china-is-tomorrows/

Here’s something you didn’t know about the Strait of Hormuz: It is named after Ahura Mazda, the Zoroastrian sky god. And here’s another: In about 20 years, Iran will likely be unable to throttle the global economy by closing this maritime chokepoint, as it did in response to the latest U.S.-Israeli war on its Islamic regime.

Why? Because we’ll be two decades further down the road to decarbonization. Oil will still flow out of the Strait, but it will matter significantly less to the world economy and the cost of driving in the U.S. 

Electrification’s push and pull

As of early 2026, there are around 5.8 million EVs on U.S. roads, or just under 2% of all passenger vehicles. Projections for 2050 vary widely, from a low of 11% to a high of 75%.

The chasm between those figures is due to two opposing forces pulling at the market. The case against accelerated electrification is bolstered by the recent slump in EV sales, which is driven, in part, by the dismantling of pro-EV measures, such as federal EV tax credits and EPA tailpipe emissions standards. But favoring accelerated electrification is the gas price spike due to the war in Iran, which has rekindled consumer interest in going electric.

Decarbonization will help insulate the world economy against sudden oil price shocks like those caused by disruptions in the Strait of Hormuz. 

Whether the number of EVs on the road grows quickly or slowly, it is safe to assume the vehicles will make up a significantly larger part of America’s car fleet 20 years from now than they do today — and that the people who drive them will be much better insulated against sudden oil price shocks. 

The world economy as a whole should be better insulated, too, although predictions here also vary widely. 

In November 2025, the International Energy Agency (IEA), which has been predicting for years that global oil demand would peak in 2030, introduced a Current Policies Scenario. It projects that, if current government policies remain in place (rather than changing as governments promise they will), global oil demand will continue to increase for the time being, postponing “peak oil” until mid-century. 

It should be noted, however, that this change-nothing scenario was introduced following pressure from the Trump administration, which had been critical of the IEA’s pro-energy transition focus. The IEA’s Stated Policies Scenario still sees oil demand flattening around 2030 and then declining to 45% less than it is today by 2050. In the increasingly less achievable Net Zero Emissions by 2050 Scenario, oil and gas demand would drop by 75%. 

More sustainable, yes — but also more stable?

All of those scenarios were written before the current war in Iran. The closure of the Strait of Hormuz (and the U.S. counterblockade) has added economic urgency to the energy transition that’s already underway worldwide. With petroleum getting more expensive and the price of energy from renewables dropping toward so-called grid parity, economic self-interest is replacing concern for the climate as the main driver of decarbonization. 

The Strait of Hormuz is currently the linchpin of the hydrocarbon-fueled economy. But as the world pivots toward more sustainable sources of energy, a new geopolitical order will emerge. Will it be any more safe and stable? 

Rare earth elements and other critical minerals are to the clean energy age what steel was to the Industrial Revolution.

For Gulf locals, a new order may turn out to be a blessing in disguise, as the discovery of oil and gas has brought not just prosperity to the region, but also pollution, corruption, and conflict. 

The post-oil economy will have to be powered by something, though, so the Eye of Sauron will turn its gaze elsewhere — and because the infrastructure underpinning renewable energy relies on critical minerals and rare earth elements (REEs), places with access to them will fall within its sights. 

What are critical minerals and REEs?

The terms critical minerals and REEs are frequently used interchangeably, but they are distinct and that distinction will become increasingly relevant.

• Critical minerals constitute the broader category. According to the U.S. Geological Survey (USGS), these 60 materials are essential to America’s economy or national security and their supply chains are vulnerable to disruption. Critical minerals include lithium, cobalt, nickel, and graphite — key components of the lithium-ion batteries in smartphones, EVs, and the grid-scale storage systems that hold solar and wind power for later use. 

• Rare earth elements (REEs) are a subset of critical minerals that includes 17 heavy metals: the 15 metallic chemical elements known as lanthanides (e.g., gadolinium, cerium, and samarium), plus scandium and yttrium. Despite their name, REEs are not so much “rare” as they are difficult to isolate. Cerium, for instance, is as common as copper, but it and the other REEs are typically found in compounds with other elements, making extraction difficult and costly. REEs are used in the infrastructure that surrounds batteries, the magnets found in EV motors and wind turbines, and other clean energy technologies. 

To picture the significance of these minerals, think about what steel meant for the industrial age. It didn’t power the factories, but it was the material used to build them. Critical minerals (including REEs) are the steel of the clean energy age. Without them, we can’t efficiently generate, transmit, or store clean energy. That’s why there’s a race to find, mine, and process the minerals — and that race is reshaping the world’s energy security landscape. 

Hydrocarbon reserves are concentrated largely in the Middle East, plus a handful of other countries, including Venezuela, Russia, Canada, and the U.S. 

Critical minerals, including REEs, are spread out rather differently. Major potential sources include Russia, the U.S., Canada, Brazil, southern and eastern Africa, Australia, India, and Vietnam. But China holds nearly half of the global total of REE reserves: 44 out of roughly 92 million metric tons, according to the USGS.

If we follow the theory that resource-rich regions invariably attract superpower attention, then the parts of the world where these building blocks for the new energy paradigm can be found may have to start preparing for foreign bases in their backyards and foreign boots on their territory. 

One country, Greenland, has already drawn some unwelcome attention from a superpower. In January, U.S. President Donald Trump explicitly admitted that “mineral rights” were one of the U.S.’s motivations for seeking control over the Danish territory. 

China’s long game, carved in stone

Maps of hydrocarbon reserves and REE deposits have one thing in common: clear centers of gravity. For hydrocarbons, it’s the Middle East. For REEs, it’s China. But geological luck only partially explains China’s dominance in REEs and critical minerals. 

In 1992, during his famous Southern Tour of the country, Chinese leader Deng Xiaoping remarked that while “the Middle East has oil, China has rare earths.” That saying is now literally carved in stone in an industrial park in Inner Mongolia, which is home to one of China’s largest REE operations. It’s ahistorical to claim that Deng had an exact roadmap in mind for China’s rare-earth ascendancy, but his quote works as a retrospective prophecy. It’s also proof of China’s ability to play the long game — that’s the other reason it dominates in REEs, critical minerals, and the renewable energy sector as a whole. 

China now accounts for about 60% of global REE production — and Beijing is willing to go to great lengths to maintain its supply chain dominance. 

It wasn’t always thus. Until the mid-1990s, the U.S. led global REE production. But then China swept in and used state subsidies, lower environmental standards, and a long-term industrial strategy to outcompete Western companies. By the 2010s, China had achieved near-total control of the global REE market. In 2015, Molycorp, the former flagship of American REE production, filed for bankruptcy. 

China now accounts for about 60% of global REE production. Not content with its domestic deposits, the nation is acquiring REE and critical mineral projects around the world. In 2025, a Chinese company acquired an REE project in Tanzania at a nearly 200% premium over the market price — a sign of how far Beijing is willing to go to maintain its supply chain dominance. 

But what makes its dominance so durable is not the mining of REEs, but the processing and refining of the minerals. China has about 90% of global REE processing capacity, a figure that rises to 99% for heavy rare earth elements, a subset of rarer and more valuable REEs. 

That expertise is not easy to replicate. It’s taken Chinese companies decades to master the complex chemistry needed to separate and extract REEs from their compounds. That is why ore mined by Western companies often still ends up locked into Chinese processing agreements: There is effectively no viable, non-Chinese alternative.

The new energy chokepoints

While the map of global maritime chokepoints is fixed by geography, the importance of individual passages changes over time. The Strait of Hormuz, as mentioned, will almost certainly matter less in the future. The Suez Canal and the Bab el Mandeb Strait, on either side of the Red Sea, will likely stay vital as conduits for manufactured goods travelling from China to Europe, including EVs, solar panels, and other elements of the new energy order. 

China is also eyeing the use of polar shipping routes to reach Europe and North America, which would allow it to bypass traditional chokepoints. However, they’d introduce a new one: the Bering Strait — and that would give Russia and the U.S. leverage over Chinese trade.

The infrastructure layer of the global clean energy transition is largely controlled by China, and its refineries are the chokepoints of the new global energy landscape.

But here is the crucial distinction between the ages of oil and critical minerals: Geography is no longer the primary factor in strategic power. With oil, control of strategic passages such as the Strait of Hormuz means control of the energy supply. With critical minerals, geography still matters, but the decisive factor is industrial. 

Today, many countries can refine oil. But almost none can process REEs and other critical minerals at scale outside of China. This is the real endpoint of Deng’s 1992 vision: Chinese REE refineries are the chokepoints of the new global energy landscape. 

And China has already demonstrated that it is not afraid to weaponize its dominance. In 2010, it banned REE exports to Japan over a fishing trawler incident. In 2023, it imposed a global ban on the export of REE separation and processing technologies — the ban was explicitly designed to prevent the development of refining capacity elsewhere. 

For the renewables industry, this is a sobering reality: The infrastructure layer of the global clean energy transition is largely controlled by China — and will continue to be for the foreseeable future. To go green is, in effect, to go Chinese. 

Rich in ore, poor in refineries

How does the global energy transition affect the U.S.? In terms of raw materials, the U.S. is, literally, resource-full. According to the USGS, the country is home to an estimated 3.6 million metric tons of REE reserves — a figure that likely understates the full picture. 

In 2024, the Mountain Pass facility in California produced an estimated 45,000 metric tons of REE mineral concentrates, making the U.S. the world’s second-largest producer. The recently opened Brook Mine in Wyoming — believed to sit on the largest unconventional REE deposit in the country, with an estimated value of $37 billion — adds further depth to the American resource picture. And more mines are in development.

The U.S. has the mines of the future, but not the refineries needed to close the production loop.

But the uncomfortable reality is that mining is only the first step. For most of the past decade, the U.S. has been sending the ore it mines to China for processing. That creates strategic exposure: A single F-35 fighter jet contains over 900 pounds of REEs; a Virginia-class submarine contains around 9,200 pounds. REEs are also critical for technologies not directly related to clean energy, such as MRI and PET scanners. Should China choose to choke off REE exports, it would create crises in half a dozen vital industries, from defense to healthcare. 

The U.S. is rightfully concerned. Since 2020, the Department of Defense (DOD) has allocated more than $439 million to domestic REE processing and magnet manufacturing projects. In 2025, it concluded a multibillion-dollar partnership to scale magnet production from 1,000 to 10,000 metric tons per year over the next decade. That would still be less than 10% of what China was producing in 2018, but it would be a step towards catching up. 

Ultimately, Chinese dominance will be hard to displace in the near term. While the U.S. and Iran play tug-of-war with the Strait of Hormuz, Chinese megacorporations are fast replacing Middle Eastern petrostates as the kingmakers of the new global energy economy. 

In that new world, the U.S. will have a seat at the table. The question is whether it will be a comfortable one. It has the mines of the future, but not the refineries needed to close the production loop. Unless and until that changes, the U.S. — and the rest of the world — will remain vulnerable to an energy chokehold that could make Hormuz look manageable in retrospect. 

Strange Maps #1290

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This article The Strait of Hormuz is today’s energy chokepoint. China is tomorrow’s. is featured on Big Think.

https://bigthink.com/strange-maps/the-strait-of-hormuz-is-todays-energy-chokepoint-china-is-tomorrows/