Commodity market commentary often emphasizes discrete shocks, a single event that could trigger immediate shortage. This focus can understate how conditions developing gradually over years introduce friction that limits a system's ability to respond to even predictable supply-demand shifts.
Across energy, industrial metals and mining, persistent frictions are constraining responsiveness. These include extended development timelines, capital uncertainty, regulatory complexity and geopolitical considerations affecting production, financing and transport. While not dramatic individually, they can accumulate into a serious barrier.
This perspective doesn't assume imminent scarcity. Rather, prolonged uncertainty and friction erode the system's adaptive capacity. In such environments, routine demand growth or modest disruptions produce disproportionately large effects compared to periods of elastic supply and stable investment conditions.
Heightened geopolitical uncertainty and fiscal pressures are now increasing defense spending, intensifying resource nationalism and encouraging policy-driven capital reallocation, particularly in metals and mining markets.1,2 As we all parse the daily torrent of breaking news, we must make the additional effort to consider the second-order effects, which may influence market outcomes as much as near-term physical balances.2
The US foray into Venezuela illustrates this dynamic. Even assuming the US can coerce compliance from the remnants of the Maduro regime, returning the state oil company to historical levels of production would require over $100 billion and 5-10 years, as decades of underinvestment have left infrastructure degraded, expertise dispersed and security uncertain.3 Even optimistic scenarios face the reality that Iraq took a decade to reach projected output after 2003, despite initial expectations of rapid recovery.3
From an investment perspective, hard assets don't require crisis conditions to warrant attention. Persistent friction and capital deployment uncertainty can increase the risk of localized shortages over time, shaping outcomes when the next inflection point arrives—whether that inflection stems from demand growth, supply disruption, or both.
Important Disclosures & Definitions
1 13D Research and Strategy. (January 8, 2026). What I learned this week (Excerpt 9). 13D.com.
2 13D Research & Strategy (January 8, 2026). What I learned this week (Excerpt 11). 13D.com.
3 13D Research & Strategy (January 8, 2026). What I learned this week (Excerpt 3). 13D.com.
AAI001089 01/20/2027