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Trump is leveraging control over Iranian and Venezuelan oil supplies to counter China’s rare earth dominance, reshaping global power through strategic resource interdependence.

US President Donald Trump is prosecuting a shrewd geopolitical strategy to “control” Beijing’s access to cheap Iranian and Venezuelan oil to counter Xi Jinping’s threats to cut supplies of rare earths to the United States and to invade Taiwan.

After his lightning Venezuelan raid, Trump wants his operation against Iran over quickly, before his important forthcoming meeting with the Chinese Premier, from 31 March to 3 April.

Welcome to the new world of superpowers weaponising strategic interdependence on critical minerals, energy, technologies, finance, IT and communications. Geopolitically, controlling these is just as important as military strength, nuclear weapons and control of global shipping choke points in determining the balance between great powers.

Raw Power Politics

Here is how raw power politics is playing out on the global stage today.

Last year, Beijing threatened to use its virtual monopoly over the processing of rare earths to impose crippling restrictions on supplies to the US and Europe. Rare earths are critical for everything from electric-motor magnets, com­puter chips, cars and household appliances to advanced missiles and war planes.

Xi’s threat forced Trump into an embarrassing reversal of his ban on US companies selling high-end computer chips to China, including those for advanced AI. It also woke up the West to one of its greatest vulnerabilities. Now the US and Europe (and Australia) are investing in new proces­sing facilities for these vital compo­nents of modern industry. Their econo­mies cannot function without rare earths.

Trump’s response is to hit Beijing’s Achilles’ heel – its economic reliance on heavily discounted oil from Venezuela and Iran.

According to Energy News Beat (2 March 2026), last year, China, the world’s second-largest consumer of oil, consumed about 15.2 million barrels per day (bpd) to supply over 300 million passenger cars. China only produces 4.2 million bpd domestically, relying on imports of 11 million bpd.

It said that global trade intelligence organisation Kpler “calculates that 17 per cent of Chinese oil imports in 2025 came from Iran and Venezuela, which respectively send (or rather sent) 87 per cent and 55 per cent of their oil exports to China”.

Poisoned Wells

Moreover, that nearly 40 per cent of China’s combined crude imports comes from the pariah states of Russia, Iran, and Venezuela should be a major concern for Beijing’s energy planners. These countries are subject to sanctions, their ships are subject to seizure, and they are vulnerable to soaring insurance costs, political instability, and other geopolitical risks.

A large proportion of these imports goes to independent, low-margin Chinese “teapot” refiners in Shandong province. They process heavy oils on thin margins. “Together, these sources delivered approximately 1.7 million bpd of discounted supply,” said Energy News Beat.

According to The Diplomat (February 2, 2026), “teapots” are critical to China’s downstream economy. They refine “diesel for trucking firms, logistics companies, farmers, and construction, jet fuel for the domestic aviation market, petrochemical feedstock for fertilisers, textiles, plastics, and lubricants, and fuel oil for infrastructure, shipping, and heavy industry end users”.

Losing oil from Venezuela and Iran will lead to “increased transportation costs and construction prices, and, ultimately, local employment,” said The Diplomat.

China’s Gas Imports

Further, China imports about 40 per cent of its natural gas. It is used for industrial production, chemicals and fertilisers, transport and power generation. About 24 per cent of its imported gas comes from Qatar, which has the world’s third-largest proven reserves.

As Professor Clinton Fernandes, from the Future Operations Research Group at UNSW, writes in The Age, Qatar also “hosts the forward headquarters of US Central Command at Al-Udeid Air Base, which it built at a cost of over $US1 billion. It will spend many more billions to expand it from an expeditionary to a permanent base for more than 15,000 personnel and their aircraft.”

The US does not need “access” to Iranian or Venezuelan oil (it is oil self-sufficient); rather, it aims for “control” over oil supplies to its geopolitical rivals, Fernandes wrote.

Having governments in Iran and Venezuela more amenable to US influence is the core of Trump’s Middle East and Latin American strategies, thereby making China’s cheap oil strategy perhaps its greatest geopolitical liability.

There are other spinoffs from Trump’s strategy. Starved of Venezuelan oil, Cuba is seeking “a deal” with Trump; South American narcotics smuggling into the US has been blunted; Iran’s nuclear weapons program may be coming to an end; and Iran may wind back China’s Belt and Road Initiative across the region.

Meanwhile, the soaring price of oil has exposed Australia’s liquid energy vulnerabilities: we have just 30 days of oil reserves and depend on imported fuel over long, vulnerable trade routes. When will the Albanese Government wake up?

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Republished with thanks to News Weekly. Image courtesy of Adobe.