Critical minerals and structural oil shocks: Evidence from wavelet cross-quantile correlation

Seyi Akadiri and Oktay Ozkan

Resources Policy, 2025, vol. 103, issue C

Abstract: Over the past decade, the intersection of energy and mineral markets has emerged as a key research focus. Transitions to renewable energy drive economic growth, reduce environmental impacts, and enhance energy diversity. Critical minerals are integral to renewable energy technologies and mitigate fossil-fuel dependence. It is against this backdrop that this study examines the dynamic interconnections between critical minerals and structural oil shocks, specifically oil supply shocks (OSSs) and oil demand shocks (ODSs), using a novel Wavelet Cross-Quantile Correlation (WCQC) approach complemented by Cross-Quantile Coherency (CQC) for robustness. Analyzing monthly data from 1975 to 2024 reveals significant long-term relationships, particularly at low frequencies, with OSSs predominantly impacting minerals linked to energy infrastructure and ODSs influencing broader industrial and economic activities. Geopolitical risks amplify these interdependencies, emphasizing the critical role of resource security in a globally interconnected economy. Policy recommendations advocate resource diversification, sustainable extraction, and innovation to mitigate the adverse impacts of energy and resource market volatility, fostering resilience and economic stability in the face of global uncertainty.

Keywords: Critical minerals; Structural oil shocks; Time-series models; Dynamic quantile regression (search for similar items in EconPapers)
JEL-codes: C32 Q31 Q43 Q52 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:103:y:2025:i:c:s0301420725001126

DOI: 10.1016/j.resourpol.2025.105570

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