Analysis of the Potential Impact of Geopolitical Tensions on Energy, Defense, and Raw Materials Investments

Based on the latest data and news reports I have collected, I now provide a systematic and comprehensive analysis report.

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In January 2026, U.S. lawmakers visited Copenhagen to respond to the latest threatening remarks from the Trump administration regarding Greenland. This event marks a significant escalation of geopolitical tensions, focusing global attention on the strategic value of the Arctic region [1][2].

• Resource Endowment
  : Of the 34 critical minerals identified by the EU, 31 can be found in Greenland, with rare earth reserves reaching 1.5 million tons (8th in the world), and approximately 17.5 billion barrels of undiscovered oil in adjacent waters [3][4]
• Geographical Location
  : Connects the Arctic, Canada’s Northwest Passage, and the North Atlantic Passage, located on the shortest air route from North America to Europe and Russia
• Military Value
  : Houses a U.S. Air Force base (Thule Air Base), with important military strategic significance

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Currently, global rare earth supply is highly concentrated in China:

• Mining
  : China controls approximately 60% of global rare earth mining volume [5]
• Smelting and Processing
  : Controls 85-90% of global refining capacity [5]
• Downstream Manufacturing
  : Dominates nearly 90% of high-strength permanent magnet production (used in electric vehicles, wind turbines, and defense systems)

This supply chain structure leaves Western countries with significant vulnerabilities in the critical minerals sector. China’s 2025 export control measures on heavy rare earths further exacerbated the supply chain crisis, pushing the U.S. to accelerate its search for alternative supply sources [1].

According to 2025 data from the U.S. Geological Survey (USGS), Greenland has two world-class rare earth deposits:

Deposit Name	Reserve Scale	Rare Earth Type	Ore Grade
Kvanefjeld	11 million tons (including 370,000 tons of heavy rare earths)	Light Rare Earths + Heavy Rare Earths	1.43%
Tanbreez	28.2 million tons (27% are heavy rare earths)	Heavy Rare Earths Dominant	0.38%

• MP Materials (MP)
  stock performance confirms the market’s enthusiastic pursuit of rare earth investments: From September 2024 to January 2026, the stock price soared from $12.79 to $66.70, representing a staggering increase of
  421.50%
  [0]
• The U.S. Department of Defense predicts that advanced processing technology can reduce rare earth supply risks by
  60%
  within two years [6]
• U.S. rare earth production is expected to increase by
  40%
  in 2026, strengthening critical defense and technology supply chains [6]

The 2026 geopolitical landscape is driving supply chain restructuring:

• The
  QUAD nations
  (the U.S., Japan, Australia, India) and the EU are establishing long-term, legally binding rare earth trade and investment agreements [7]
• The concept of
  “Friend-shoring”
  is making substantial progress, with investment shifting from China to countries with aligned political stances [7]
• By 2026, these “trusted network” supply chains will move from the planning phase to actual operation

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Geopolitical tensions are directly driving a shift in the investment logic of the defense sector:

1. Deep Binding of Critical Minerals to National Security
   • Rare earth elements are fundamental materials for manufacturing advanced electronic products and precision-guided weapons [6]
   • The defense industry is highly sensitive to rare earth supply disruptions

2. Supply Chain Localization/Diversification
   • The U.S. Department of Defense has reached equity cooperation agreements with rare earth companies such as MP Materials [1]
   • Established bilateral agreements with Saudi Arabia, Japan, and Australia to develop rare earth capabilities [1]

Indicator	ExxonMobil (XOM)	Lockheed Martin (LMT)
Period Increase	+11.47%	+1.86%
50-Day Moving Average	$118.89	$480.84
200-Day Moving Average	$112.05	$470.18
Current Price Position	Above 50-day/200-day moving averages	Above 50-day/200-day moving averages
Daily Volatility	1.46%	1.64%

• The energy sector benefits from geopolitical risk premiums, with XOM rising 11.47% over 17 months [0]
• LMT’s stock price is highly volatile (peaking at $618.95, bottoming at $410.11, with an amplitude of 49.68%), but the long-term trend is upward [0]
• Both current prices are above key moving averages, indicating that the medium-term upward trend remains unchanged

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• According to 2023 data from the Geological Survey of Denmark and Greenland, the northeastern region may contain approximately
  31 billion barrels of oil equivalent
  in hydrocarbons [4]
• Data from the U.S. Geological Survey shows that the waters near Greenland contain more than
  17.5 billion barrels of undiscovered oil
• In addition, it is rich in resources such as titanium, graphite, uranium, lithium, nickel, and copper

• JPMorgan research shows that the U.S. dollar’s influence on oil prices is weakening
• Between 2005 and 2013, a 1% appreciation of the U.S. dollar led to an approximately 3% drop in oil prices
• Between 2014 and 2022, the same magnitude of U.S. dollar appreciation only led to a 0.2% drop in oil prices
• An anomalous phenomenon of simultaneous declines in oil and the U.S. dollar even occurred in 2025 [3]

Current market data shows that the

, ranking among the top performers across all sectors [0]. This performance reflects:

1. Rising Risk Premiums
   : Geopolitical tensions support oil prices
2. Demand for Supply Chain Security
   : Countries are accelerating energy supply diversification
3. Expectations for Arctic Resource Development
   : The energy development prospects in regions such as Greenland are attracting capital attention

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Investment Field	Recommended Strategy	Risk Warning
Rare Earths	Focus on rare earth miners such as MP Materials and Lynas	High stock price volatility (MP’s daily volatility is 5.56%), beware of chasing highs
Defense	Focus on defense contractors such as Lockheed Martin and Raytheon	Long order cycles, pay attention to changes in government budgets
Energy	Focus on integrated energy companies such as ExxonMobil and Chevron	Performance is affected by oil price fluctuations, pay attention to OPEC+ dynamics

1. Rare Earth Supply Chain Investment
   • Upstream: Rare earth projects in Greenland and Australia
   • Midstream: Expansion of rare earth processing capacity in North America
   • Downstream: Permanent magnet manufacturing enterprises

2. Defense Technology Independence
   • Advanced materials (carbon fiber, special alloys)
   • Precision-guided systems
   • Space and cybersecurity

3. Energy Security Supply Chain
   • Venezuelan oil assets (the U.S. is seeking access to its 303 billion barrels of proven reserves) [3]
   • Arctic energy development
   • Construction of critical mineral reserve systems

• It is recommended to allocate 15-20% of the investment portfolio to geopolitically sensitive sectors
• Maintain a balanced allocation among rare earths, defense, and energy
• Focus on beneficiaries of “friend-shoring”

• Optimistic Scenario
  : Greenland rare earth projects progress smoothly, U.S. supply chain diversification is successful → Rare earth stocks and defense stocks rise
• Neutral Scenario
  : Geopolitical tensions persist but do not escalate → The energy and defense sectors receive risk premiums
• Pessimistic Scenario
  : Conflict escalation leads to supply chain disruptions → Demand for safe-haven assets (gold, government bonds) rises

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Geopolitical tensions are profoundly reshaping the global investment landscape:

1. Raw Materials (Rare Earths) Sector
   : Supply chain security has become the core investment logic, and the “friend-shoring” trend creates historic opportunities for non-Chinese rare earth projects

2. Defense Sector
   : Critical minerals are deeply bound to national security, and sustained growth in defense budgets is expected to support sector performance

3. Energy Sector
   : The strategic value of traditional energy has been re-evaluated, and Arctic energy development has become a new investment frontier

: Focus on the three main themes of , , and , and allocate to enterprises with competitive advantages in the above-mentioned fields.

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[1] CSIS - “Greenland, Rare Earths, and Arctic Security” (https://www.csis.org/analysis/greenland-rare-earths-and-arctic-security)

[2] Daily Sabah - “Strategic value, vast critical minerals: Why US wants Greenland” (https://www.dailysabah.com/business/economy/strategic-value-vast-critical-minerals-why-us-wants-greenland)

[3] National Business Daily - “More Than 303 Billion Barrels of Oil and 1.5 Million Tons of Rare Earths! The U.S. Has Its Eye on Venezuela and Greenland” (https://www.nbd.com.cn/articles/2026-01-10/4214918.html)

[4] Tencent News - “How Rich is Greenland? Rich Enough for the U.S. to Press Hard for Trillions of Dollars Worth of Rare Earths” (https://news.qq.com/rain/a/20260109A06VL000)

[5] MiningVisuals - “The Arctic Pivot: Greenland’s Mineral Wealth and the Race to Break China’s Monopoly” (https://www.miningvisuals.com/post/the-arctic-pivot-greenland-s-mineral-wealth-and-the-race-to-break-china-s-monopoly)

[6] Farmonaut - “Pentagon Rare Earth: 7 Powerful Shifts In US Production 2026” (https://farmonaut.com/defence/pentagon-rare-earth-7-powerful-shifts-in-us-production-2026)

[7] Medium - “The Strategic Future of Rare Earth Elements (REEs) in 2026” (https://medium.com/@Artiscribe/the-strategic-future-of-rare-earth-elements-rees-in-2026-6147a17f4e3b)

[8] Wellington - “Geopolitics in 2026: Risks and opportunities we’re watching” (https://www.wellington.com/en-us/institutional/insights/geopolitics-in-2026-risks-and-opportunities-were-watching)

[0] Jinling AI Brokerage API Data