Russia Considers Banning Uranium Exports; Could cause a new jump in uranium prices

Citing comments from Deputy Prime Minister Alexander Novak, the Russian state news agency TASS reported on March 21 that the country is considering a ban on uranium exports. Presumably, the potential ban would be in retaliation for US President Biden’s decision to refuse to buy Russian oil.

Of course, it is not clear whether Russia will actually implement such a policy, but it seems likely that uranium prices will rise if Russia makes good on its threat. The third largest importer of uranium to the US, Russia supplies about 16% of the uranium that US nuclear plants use to generate electricity.

Source: US Energy Information Administration.

On the other hand, and quite related to this, President Biden, a Democrat, is being pressured by several Republican US senators from Western states to demand that the US. stop buying russian uranium. Of course, some of this pressure qualifies as political theater, since states like Wyoming have significant uranium deposits, but a decade of low uranium prices has forced mines to close.

In fact, the United States as a whole now extracts very little of the uranium consumed by its commercial nuclear plants. US production has been falling dramatically for the last six or seven years, and is now so low that the US Energy Information Administration does not generally publish the total amount produced.

Total production of uranium concentrate (pounds of U3O8) in the US, 1996-2021. “W” means data is on hold. Source: US Energy Information Administration.

A complication in any US decision not to buy uranium from Russia is the multi-country process required to convert uranium ore into nuclear fuel rods. For example, the former Russian states of Kazakhstan and Uzbekistan have extensive uranium refining and enrichment facilities and are also large uranium producers. They provide 22% and 8%, respectively, of the uranium purchased by the US. What is not clear, however, is whether Kazakhstan and Uzbekistan buy any amount of uranium ore from Russia as a key input for fuel they produce (they do), but how much they buy. Does that mean that some imports from Kazakhstan and Uzbekistan should also not be accepted?

Uranium spot prices are trading near an 11-year high around $58 a pound and have risen about $13 a pound over the past month on supply fears from Russia. However, we note that localized uranium represents only a fraction of the uranium used worldwide; most transactions are done through long-term contracts.

Source: Commercial Economics

Uranium prices may also be boosted in the long term by reduced exposure of European countries to Russian-supplied oil and natural gas. For example, UK Prime Minister Boris Johnson says he is working with nuclear industry leaders “to remove barriers and move forward with future nuclear projects in the UK faster and cheaper.” Nuclear power currently provides around 15% of Britain’s electricity.

Even Germany, a country that has executed a decades-long plan to shut down its nuclear power plants, recently considered reviving the industry. However, this month the country decided that the risks and costs associated with such a radical change in energy policy outweigh the benefits.


The information for this report was found through Tass, the EIA and the sources mentioned. The author has no affiliations related to this organization. It is not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author has no licenses.

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