Shock waves from the war Israel and the United States launched against Iran at the end of February have sent oil prices skyrocketing—from $64 a barrel a year ago to $106 a barrel now. This episode joins a long list of embargoes, oil-price shocks, nationalization waves, and resource wars that have made petroleum the textbook case of commodity-driven instability. Yet the kinds of economic and geopolitical volatility that defined the oil age may well look minor compared with the turbulence the critical minerals era is poised to unleash.

Starting in the late nineteenth century, as the world industrialized and the internal combustion engine displaced coal and steam, access to petroleum became inseparable from national power. The emergence of critical minerals—cobalt, lithium, nickel, rare earths, and a dozen others essential to the energy transition, digital infrastructure, and advanced military systems—already bears some parallels to this history. A bonanza is underway: according to the International Energy Agency, in 2024 demand for lithium soared by nearly 30 percent, roughly three times the average annual pace during the 2010s, and demand for cobalt, graphite, nickel, and rare earths each climbed by six to eight percent. Prices for the heavy rare earths (such as dysprosium and terbium) on which electric motors and advanced weaponry depend have more than tripled since 2020. The IEA expects that by 2040, demand for lithium will be five times as large as it was in 2040; the world’s need for cobalt and other rare earths will also rise sharply.

This demand is spurring exploration across the developing world—and raising the prospect of a new round of resource curses in countries lacking the institutions to properly manage sudden mineral wealth. Familiar risks from the oil era loom: elite capture, failed economic diversification, and so-called Dutch disease (named for the consequences of a natural gas boom in the Netherlands), or when high revenue from resource exports drives up the value of a country’s currency and crimps other export industries.

But the comparison has real limits. Petroleum-exporting countries faced formidable challenges, but they operated in a world with functioning multilateral institutions, a dominant reserve currency, and a superpower willing—however imperfectly—to underwrite the rules of the global economy. The uncertainties surrounding critical minerals—structural, geopolitical, technological, and institutional—are of a fundamentally different and broader order. And no one is ready to contend with them. Imagining that the critical minerals era will only bring the same risks as the oil boom did (or even fantasizing that a renewables-dominated future will be less geopolitically volatile) dangerously underestimates the preparation states will need to make.

The first decades of the oil age were volatile: the industry’s initial market was kerosene for lighting, but the rise of Edison’s electric bulb in the 1880s nearly rendered oil obsolete before gasoline and the internal combustion engine rescued it. But once the automobile, the oil-burning warship, and the petrochemical industry took hold in the early twentieth century, oil’s end uses—transportation, heating, petrochemicals, power generation—settled into a pattern that was varied, widely distributed, and relatively stable.

And even in this early period, the rules that governed the production, refining, pricing, and distribution of oil were sometimes disputed, but they were broadly understood. A handful of major U.S. and European companies controlled the industry; this oligopoly operated largely by way of private commercial arrangements and concessions negotiated with producing states (which often had limited bargaining leverage). In the 1960s and 1970s, OPEC and newly assertive producer states across Latin America, the Middle East, and North Africa shattered that system, nationalizing reserves and wresting pricing power from corporations. The transition was disruptive, but the underlying logic of the market—who held reserves, who needed supply, what determined price—remained legible. And crucially, by then, the international system had shock absorbers: the Bretton Woods institutions, U.S. dollar hegemony, and a relatively stable Western-led geopolitical order created a backstop against supply disruptions and price volatility.

Trade in oil ran on a recognizable scaffolding. Pricing benchmarks were set in London and New York and accepted globally. Commercial disputes were adjudicated in Western commercial courts and through the........

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