Since Putin’s war on Ukraine began, western powers scrambled to sanction the exports from Russia.

Gas, oil, minerals and manufactured products were quickly sanctioned by a collation of Western nations, outraged at the biggest outbreak of war in Europe since WWII.

As we all know too well, energy prices surged and turbocharged inflation and the cost of goods and services, from food to airline tickets, home heating and petrol skyrocketed.

When it came to sanctions, one notable exception was uranium.

Russia’s state-owned nuclear energy monopoly, Rosatom, an exporter of enriched uranium to many nuclear energy nations (they also build nuclear power stations around the world) was allowed to continue business as usual. 

In fact, the United States and Europe, bankrolling Kyiv’s fight against Russia to the tune of hundreds of billions, is still partly financing the Russian war machine by continuing to buy their enriched uranium.

Imports of such enriched uranium from Russia, according to ABC News, hit $1.7 billion in early 2023 to the U.S. and Europe, according to trade data and experts. 

Too Important to Sanction

The problem is, that the US and Europe are not set up to handle their own uranium supply chains. This may change in the coming years, with the US Congress pushing the White House to ban imports of Russian nuclear fuel. However, ensuring domestic supply chains are in place will take years to build out, with many complications to overcome.

The issue is “a vulnerability” for both US and EU national and economic security.

The US Energy Department has made the case that any interruption in the supply of enriched Russian uranium could cause operational disruptions at commercial nuclear reactors, Bloomberg reports.

Despite the US and European nations deciding Russian uranium imports are too important to sanction, Rosatom themselves have their own problems.

Start of a Uranium Supply Crisis?

It appears now, given the global uranium supply crisis, which has seen the spot price rise above 12-year highs – Rosatom is struggling to find raw supply.

In a note to investors this week, RBC Capital Partners alerted readers that Rosatom is searching for new uranium pounds and has been forced into the spot market.

“Our industry checks indicate increased participation from… Russian, Chinese and Korean entities…”

“Russian involvement has piqued our interest in particular, as Russia has historically been seen as self-sufficient on supply…,” the note read.

The analysis also caveated that they don’t have enough information at this point to make any strong conclusions.

Later, uranium investor Harris Kupperman confirmed the news. 

Rosatom had sent the market a Request for Proposal (RFP) for uranium supply in recent days.

With China in talks with Kazakhstan (a major Rosatom uranium mine source) to secure long-term deals, and many partner reactors to fuel, the Russian energy giant appears to have been forced to scramble for more options.  

The fact that a major, ‘too important to sanction’ supplier of global uranium appears to be facing a supply crunch is in itself extraordinary.

This kind of situation could have a wide range of ripple effects across the global nuclear power industry and could turbocharge uranium prices.

In the last three weeks, spot uranium has surged nearly $13 or so.

As the Managing Director of Australian and African uranium player Deep Yellow Ltd. said recently, global nuclear energy bodies “…don’t know where the **** this stuff’s going to come from.” 

“I think we’re coming into a new era,” he said.