Markets demand execution amid US-China critical minerals duel – Rystad Energy market note

Brent is hovering at $67 today as global markets speculate over whether recent American policy changes will deliver on promises of economic growth.

The critical minerals duel between China and the US is gaining steam, while India gives into the US administration’s pressure to drastically decrease Russian oil imports.

Washington’s inaugural Critical Minerals Ministerial marked a significant escalation in the West’s attempt to dilute China’s dominance in rare earths and strategic minerals. The US convened 54 countries, signed 11 bilateral frameworks spanning South America, Africa, Central Asia, and the UK, and floated a tariff-enforced price-floor regime across critical mineral value chains.

Yet markets were unimpressed.

Rare-earth equities sold off sharply as investors repriced long-term structural intent against the absence of concrete, mineral-specific price floors.

For now, the only binding floor remains the pre-existing $110-per-kilogram US Department of Defense (DoD) contract with MP Materials, leaving policy execution risk firmly in focus.

China’s response has been notably restrained. Official silence following a same day call between US President Donald Trump and his Chinese counterpart Xi Jinping suggests that Beijing is unwilling, for now, to jeopardize the fragile October 2025 truce on rare-earth magnets.

However, China is simultaneously reinforcing its strategic depth elsewhere, particularly in South America, where renewed diplomatic engagement signals reconfiguration rather than retreat.

The result is a slow-burn geopolitical contest rather than immediate escalation, with implementation timelines, retaliation risk, and downstream cost inflation still unresolved.

Energy trade flows provided a clearer signal. India’s Russian crude imports have already fallen sharply, declining by roughly 800,000 barrels per day (bpd) since October as refiners diversify toward Middle Eastern, African, and Latin American barrels.

While a full halt remains unlikely due to New Delhi’s preference for strategic autonomy, the direction of travel is unmistakable.

Russia faces the growing risk of losing a key outlet and deeper dependence on China at widening discounts.

Macro-financial conditions remain fragile. The European Central Bank (ECB) and Bank of England (BoE) held rates, reflecting divergent inflation dynamics, while US data pointed to weakening labor demand amid resilient investment.

Equity volatility intensified as artificial intelligence (AI)-related disruption fears hit software stocks, and speculative leverage unwound in crypto. Oil prices, on the other hand, are bound to continue to depend on the US Iran negotiation, with any hints of escalation bringing about price flare-up.