Russia's embargo on uranium supplies will throw USA in major energy crisis

In order to force the United States not to supply HIMARS MLRS and other similar weapons to Ukraine, Russia should embargo uranium and uranium fuel supplies. Uranium inversion and enrichment services could be embargoed as well. For a start, Russia could switch to "uranium for rubles" option.

The US nears energy crisis due to arms supplies to Ukraine

The Russian Foreign Ministry warned that in case the Armed Forces of Ukraine used American MLRS or other long-range NATO weapons to strike the Russian territory, the consequences will be more than just serious.

A serious restrictive measure against the United States could be the cessation of uranium and fuel uranium (U308) supplies. Russia may also stop providing services for the conversion and enrichment of uranium. All this will trigger an energy crisis in the United States.

With this in mind, US energy companies Duke Energy and Exelon, as well as the US Atomic Energy Institute, opposed sanctions against Russian uranium in March. Washington did not ban imports of Russian uranium into the United States, but it did ban imports of Russian oil, oil products, natural gas and coal.

The US dependence on Russian uranium mirrors Europe's natural gas dependence. There is a lot of talk about sanctions against the Russian Federation, but when they come from Russia's side, then everyone is in a panic for three reasons:

1. There is little uranium fuel on the market.
2. Russia is the only country that makes cheap uranium fuel.
3. Russia is the only country that has a full cycle of its utilization.

The US is critically dependent on imports of uranium

According to the IAEA, the United States has 93 nuclear reactors with a capacity of 95 GW. They produce 20 percent of all electricity in the country. At the same time, the US has only one operating uranium production plant. The Americans do not enrich uranium to the fuel grade. The USA depends on Russia's uranium imports almost completely.

According to Bloomberg, in 2020 Russia's share of US imports was 16.5 percent in terms of unenriched uranium and 23 percent in terms for U308 (fuel concentrate). Together, Russia, Kazakhstan and Uzbekistan supply the United States with about half of the uranium (in Kazakhstan — through Uranium One, a subsidiary of Rosatom) needed to operate nuclear power plants — 10.3 million kg in 2020, Reuters said.

According to Rosatom, in May 2022, Russia became world's second largest producer of uranium in the world. Russia confidently holds the first place in its conversion and enrichment (36 percent) and steadily enters the top three in fuel production (17 percent), giving way only to Westinghouse (USA) and Framatome (France).

Refusal from Russian uranium and services ups fuel prices

According to S&P Global Commodity, the world is already trying to abandon enrichment services provided by the Russian state-run company Tenex. This has only led to a 65-percent increase in prices. The price of the concentrate itself (U308) has risen by 20 percent.

At the same time, Russian fuel remains the cheapest as Russia uses an advanced enrichment technology in 11th generation centrifuges.

Alexander Uvarov, editor-in-chief of atominfo.ru nuclear energy website told RIA Novosti:

"Due to the fact that a number of nuclear power plants in the United States can barely cover their losses, the refusal to supply enriched uranium from Russia and, as a result, an increase in prices on nuclear fuel will be a straw that will break the camel's back."

There is no substitute for Russian nuclear fuel, and Moscow should take advantage of it

USA's dependence on Russian uranium is critical. France, where the United States take uranium ore for enrichment, significantly lags behind Russia:

• French centrifuges are much inferior to Russian ones in terms of their efficiency;
• The diffusion technology that the USA uses is less effective and more expensive.

It is worthy of note that nuclear power plants go back to service against the backdrop of the natural gas war in the world:

• Japan has modernized its power units and starts launching them again;
• Germany has decided not to shut down its nuclear power plants at all;
• Rosatom's order portfolio includes more than 30 power units.

Nuclear energy is held in high esteem in developing countries. More importantly, this is green energy, given the possession of closed nuclear fuel cycle technology, in which the amount of nuclear waste will constantly tend to vanish. Russia is the only country in the world that has such technology.

The United States worries about its presence in Kazakhstan, and France — in Mali. As for Kazakhstan, Westerners are leaving on their own, since the delivery route that does not pass through Russia has not been confirmed. Cameco said that cargo insurance for such shipments on the Russian route was cancelled.

The demand for uranium and its enrichment will grow, and this complex will become more expensive. This is a great resource for Russian counter-sanctions against the United States. As a preventive measure, Russia could start with uranium for rubles option.