Global Power Struggle Emerges Over Nickel and Palm Oil
Power struggle over nickel and palm oil
Data verified and updated as of November 2025
A new phase of geopolitical competition is emerging as major economies intensify their battle for influence over two strategically vital commodities: nickel and palm oil. Both resources—central to global energy security and agricultural supply chains—have become focal points in the broader contest for industrial dominance, climate-transition leadership, and food security.
Analysts warn that the tug-of-war over nickel, a critical input for electric vehicle (EV) batteries, and palm oil, the world’s most widely used edible oil, is reshaping global trade alignments. Southeast Asia, particularly Indonesia and Malaysia, sits at the heart of this strategic contest due to its commanding role in global production.
Nickel: EV transition drives resource nationalism
Indonesia, home to the world’s largest nickel reserves, continues to leverage its resource advantage to build downstream processing capacity and attract global EV manufacturers. Its export restrictions on raw nickel, combined with aggressive industrial policies, have amplified geopolitical tensions with Western economies that rely heavily on stable critical mineral supply chains.
China remains the dominant investor in Indonesia’s nickel ecosystem, raising concerns in Washington and Brussels over supply concentration risks. Both powers are now accelerating alternative supply arrangements through new mining partnerships in Australia, Africa, and Canada as they attempt to reduce dependence on China-linked processing hubs.
Industry observers note that nickel is no longer a simple commodity—its supply has become a strategic lever that may influence the pace and cost of the global green transition.
Palm oil: Trade barriers expose deepening fractures
Palm oil has simultaneously become another arena of contention. Malaysia and Indonesia—the top two global producers—continue to challenge increasingly stringent sustainability standards imposed by Western regulators, particularly within the European Union.
Producers argue that deforestation-linked restrictions and traceability rules disproportionately penalise their industries and undermine the economic prospects of millions of smallholders. The EU, however, maintains that higher standards are non-negotiable as part of its climate and biodiversity commitments.
The result has been a rise in policy pushback, including coordinated diplomatic action by Malaysia and Indonesia through regional palm oil councils. Meanwhile, large importers such as China, India, and Middle Eastern economies are strengthening procurement agreements with Southeast Asian suppliers to ensure long-term food and industrial security.
Commodity leverage reshaping regional influence
Economists note that control over nickel and palm oil grants Southeast Asia unprecedented bargaining power in global markets. Both commodities sit at the intersection of environmental policy, industrial competitiveness, and geopolitical rivalry.
Nickel is indispensable for battery manufacturing, and palm oil remains foundational to global food processing, consumer goods, and renewable fuels. As demand accelerates, competition for secure supply chains is expected to intensify further.
Market strategists forecast heightened volatility across both sectors as governments expand subsidies, impose new export controls, and form bilateral supply agreements to protect national interests.
The emerging power struggle underscores a broader shift: resource diplomacy is once again becoming a central instrument of global influence, with Southeast Asia positioned at the core of this strategic recalibration.
