From Oil, Oxides & Algorithms: The Hidden Supply Chain War Reshaping Global Power

Highlights

• The U.S. faces a systems challenge in Great Powers Era 2.0, where power is defined by control over chokepoints like Hormuz, subsea cables, and critical minerals—not just military dominance—while adversaries like Iran, China, and Russia use asymmetric strategies to impose costs without direct confrontation.
• America must pivot from projecting dominance to architecting stability through multilateral agreements, redundant infrastructure, secure critical mineral supply chains, and continuous backchannel diplomacy to prevent systemic shocks to global energy and data systems.
• The U.S. holds the strongest hand with energy abundance, deep capital markets, and an adaptive culture, but must securitize strategic assets and integrate finance, technology, and geopolitics as one system to expand its competitive advantage in the emerging era.

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The crisis spanning the Strait of Hormuz, Iran, Israel, and the United States is not a regional flare-up—it is the continuation of what Rare Earth Exchanges has coined an opening foray into the Great Powers Era 2.0. For the United States, this is not just another geopolitical test. It is a systems challenge—one that will determine whether America adapts its model of power or clings to a fading version of it.

Power today is not defined solely by territory held. It is defined by control over chokepoints, systems, infrastructure, and perception. Roughly a fifth of global oil flows through Hormuz. More than 95% of global data moves through subsea cables.  Rare earths and Critical Materials are the new chokepoints within the system, and the U.S. leadership of the past decades was slow to recognize this. This has changed under Trump 2.0.  In this world, disruption—not domination—is the fastest path to leverage. And America’s adversaries understand that.

Recent U.S. resupply to Israel demonstrates commitment and capability. But it also reveals something deeper: modern war is industrial, sustained, and resource-intensive. Precision munitions, missile defense systems, and logistics chains are not infinite. They must be built, replenished, and scaled.  This is a hard reality that the U.S. has not accounted for and may prove more decisive than U.S. analysts have accounted for.  Meanwhile, Iran’s strategy is not to win conventionally—it is to impose cost asymmetrically. It seeks to leverage over shipping lanes, energy flows, and increasingly, we believe digital infrastructure. It doesn’t need to shut the system down—only to make it unstable.

Meanwhile, Russia and China operate in the background, and they are not neutral. Moscow probes through indirect support—intelligence, coordination, and diplomatic cover—without crossing into direct conflict. On the surface, Beijing appears to be playing a more traditional role, sustaining Iran economically while advocating stability to protect its own energy flows.   Iran also has access to Chinese high-tech infrastructure, including satellite services it has procured. However, the real leverage may prove to be China's restrictive 'trade policies' on dual-use resources.  Warfare is evolutionary.  China may be using this conflict as a laboratory. This is not an alliance—it is a convergence designed to constrain U.S. power without triggering full-scale war.

Perhaps the most dangerous battlefield, however, is the informational one. Competing narratives—of Iranian weakness versus resilience—are not just commentary. They are tools. Perception is now part of the operating environment. When policymakers begin to believe their own narrative, the risk of miscalculation rises sharply.  This is only compounded when America's strategy fails to account for resource restrictions as a weapon in the conflict.

From Projection to Architecture

For the United States, the path forward is not more signaling—it is smarter system design.

Near-term escalation is likely: maritime friction, cyber disruptions, economic pressure. The real danger is systemic shock—attacks on energy or data infrastructure that cascade globally. Avoiding that outcome requires a strategic pivot: from solely projecting dominance (although the world inherently understands the superior overall firepower of the U.S. military)  to architecting stability.

That means:

• Building multilateral guarantees of passage in Hormuz that reduce friction without conceding control
• Investing in redundant digital infrastructure to blunt the impact of cable disruption
• Creating targeted economic off-ramps that incentivize de-escalation without signaling weakness
• Scaling myriad and targeted backchannel diplomacy—technical, continuous, and insulated from political volatility
• Building secure and durable REE and critical mineral infrastructure before re-engaging in significant conflicts

These are not traditional moves. They require discipline, coordination, and political risk. But they reflect the reality of the system we are now in.

Why America Still Wins—It Must Think Bigger

If the United States adjusts to this reality, it holds the strongest hand. America is energy-rich, resource-abundant, and anchored by the deepest capital markets in the world. More importantly, it possesses something less tangible but more decisive: an adaptive culture. It is decentralized, innovative, and capable of rapid reinvention under pressure.  U.S. security posture needs to include secure capabilities for REEs, critical minerals, and commercial-scale capabilities across all material science disciplines.   This is non-negotiable.

The race to securitize and monetize strategic assets—energy, critical minerals, data infrastructure—has barely begun. We are still in the pre-game. The next phase of growth will not come from efficiency alone, but from integration: finance, technology, and geopolitics operating as one system. That is where the United States has historically excelled—and can again, big time.

By contrast, China’s model carries mounting internal tensions as well. Centralized control can deliver scale, but as we have seen time and time again,  it can also limit flexibility—especially in a world that increasingly demands localized, value-added engagement across diverse regions. For example, the contacts in African nations we talk to regularly are so ready for business outside of China.  They want options, negotiation space, and the opportunity for value-added advancement.

The implication is clear: if America shifts from simply reacting to events with predictable military force to designing systems that support industrial infrastructure and fund basic science, it does not just remain competitive—it expands its advantage for future generations of Americans.

Great Powers Era 2.0 will not be decided by any single conflict in the Middle East. It will be shaped by those who recognize the era shift—and move first to build the physical, financial, and digital infrastructure the world depends on. For the United States, that moment is not on the horizon. It is already here.