Oil Price Shocks Don't Always Hurt Rare Earth Exports-New Study Shows the Relationship Depends on the Crisis

Highlights

• A study in Energy Policy found that oil market instability hurt rare earth exports during COVID-19 but supported them during geopolitical conflicts like the Russia-Ukraine war.
• Researchers used a bootstrap rolling-window Granger causality model on monthly data from 2012 to mid-2024 to capture how the oil-rare earth relationship shifts over time.
• The study found rare earth exports can also influence oil market uncertainty, revealing a two-way link between critical minerals and global energy markets.
• Findings predate China's 2025 export controls on medium and heavy rare earths, meaning today's supply chain dynamics may differ significantly from the period analyzed.
• Governments and investors are urged to monitor geopolitical events, energy markets, and policy shifts—not just mining capacity—to manage rare earth supply risk.

Can oil market turmoil boost rare earth exports? Sometimes yes—and sometimes exactly the opposite. That's the conclusion of a study published at the start of the year, led by Zhengzheng Li with Shenyu Liu—both with Qingdao University (School of Economics) and Oana-Ramona Lobont (opens in a new tab) with West University of Timisoara—and published in Energy Policy. Using more than a decade of monthly data and advanced statistical modeling, the researchers found that the relationship between oil price uncertainty and China's rare earth exports changes depending on global events. During the COVID-19 pandemic, oil market instability coincided with weaker rare earth exports as investment and economic activity slowed. In contrast, geopolitical crises such as the Russia–Ukraine war and the Israel–Hamas conflict increased both oil price uncertainty and demand for strategically important rare earths, supporting stronger exports.

Rather than relying on conventional economic averages, the researchers analyzed monthly data from 2012 through mid-2024 using a bootstrap rolling-window Granger causality model. This technique allowed them to identify when the relationship between oil markets and rare earth exports strengthened, weakened, or reversed over time, instead of assuming one constant relationship.

Professor Oana-Ramona Lobont, West University of Timisoara, Romania

The findings reinforce an increasingly important reality: critical minerals no longer trade solely on industrial demand. Geopolitical conflict, energy security concerns, renewable energy investment, and strategic stockpiling all influence rare earth exports. The study also found evidence that changes in rare earth exports can themselves affect oil market uncertainty during certain periods, highlighting an increasingly interconnected relationship between critical minerals and global energy markets.

The research has important limitations. It measures China's export volumes, not prices, profitability, inventories, or downstream products such as magnets. The statistical relationships are observational rather than proof of direct causation, and the analysis ends before China's 2025 export controls on medium and heavy rare earths reshaped global supply chains. Consequently, today's geopolitical environment may differ substantially from the historical period examined.

For governments, manufacturers, and investors, the message is straightforward: oil markets and rare earth supply chains are becoming increasingly intertwined. Managing future supply risk will require monitoring not only mines and processing capacity, but also geopolitical events, energy markets, and policy decisions that can rapidly alter global trade flows.

Citation: Li, Z., Liu, S., & Lobont, O.-R. Oil Price Uncertainty and China's Rare Earth Exports: Driver or Constraint? Energy Policy 208 (2026): 114890. https://doi.org/10.1016/j.enpol.2025.114890 (opens in a new tab)