Aerial view of Cerro Dominador, an area in the Atacama desert where minerals are extracted, Antofagasta, Chile. Latin America’s copper, lithium, rare earths, and other strategic resources are attracting growing attention from governments and investors alike. (Shutterstock/ Freedom_wanted)

Why Latin America’s Critical Minerals Matter More After the Iran War

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Latin America’s copper, lithium, rare earths, and other strategic resources are attracting growing attention from governments and investors alike.

The United States’ war in Iran has put the commercial and geopolitical importance of Latin America into stark relief. While around 20 percent of the world’s oil hydrocarbons remain trapped behind the Strait of Hormuz, newer energy suppliers in Latin America, led by Brazil and Guyana (not to mention more Venezuelan barrels hitting international commodity trading markets), have helped offset the powerful legacy export markets in the Middle East.

Much of Latin America and the Caribbean appears poised to continue hydrocarbon development. Suriname is fast approaching first oil, and even Jamaica is considering offshore exploration leases. The Bahamas also plays an active role as a storage, blending, and transshipment center in the global oil industry. But beyond oil and gas, a less obvious ramification of the Iran War is likely to be a ratcheting up of the political attention paid to Latin American mineral resources. Two reasons stand out.

The US-Iranian conflict is demonstrating the centrality of AI-enabled warfighting in real time. AI has entered a new era of national security centrality. Underpinning the software revolution is a staggering amount of physical materials, with critical minerals such as copper, lithium, nickel, and rare earth elements (REEs) providing the energy transmission plumbing needed to generate scalable computing power.

The US-Iranian conflict has the potential to propel the energy transition. The extent to which Iran can interfere in global energy markets is now no longer in question. The 1973 oil shock provides some answers about how the current supply shock could shape energy markets in the medium- to long-term. While aggregate oil demand certainly did not fall post-1973, developers increased the relative share of alternative sources of domestic energy production, most notably nuclear and coal. 

Following Iran’s blockade of the Strait of Hormuz, energy policy conversations quickly turned to alternative means of transportation, including revived enthusiasm for overland Middle East pipelines circumventing the strait. But with the global economy learning a fast and painful lesson about over-reliance on strategic chokepoints, countries at all stages of economic development will likely opt to re-engage with widescale electrification—the so-called “energy transition.” Like with artificial intelligence (AI) power demand, electrification means........

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