Geopolitics surrounding oil—civil way in Libya, falling production in Venezuela and Iran, assaults on Saudi tankers and oil installations—not to mention contamination from Russia’s Druzhba pipeline, should be driving global prices up. They are not.

It was a report in Chinese newspapers that hinted at a restriction in the sales of rare earth materials to the U.S. that rattled traders. Rare earths are 17 elements used in computer memory, rechargeable batteries, cell phones, catalytic converters, magnets, fluorescent lighting and many other products. They have been designated by the U.S. Geological Survey as critical to the economy and national defense.

Rare earths are not, in fact, rare but are found in relatively few areas on the planet and China dominates the global market. Escalating the trade war with the U.S. would increase the risk to the global economy, which would result in slower growth and less demand for fossil fuels.

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