Uranium Stocks Surge But Ban on Russian Supplies Might Have Dire Effect to US Economy, Expert Warns

By Madz Dizon

May 03, 2024 10:30 AM EDT

Uranium Stocks Surge But Ban on Russian Supplies Might Have Dire Effect to US Economy, Expert Warns — This photograph taken on March 20, 2023, shows cylinders of uranium from the Russian cargo ship the Baltiyskiy 202, are unloaded at the port of Dunkirk, northern France.
(Photo : SAMEER AL-DOUMY/AFP via Getty Images)

According to Navigator Principal Investors CEO Kyle Shostak, the US government's decision to ban uranium supplies from Russia is expected to harm the United States' economy.

Shostak explains that finding an appropriate replacement for uranium overnight will be a significant challenge.

US Ban on Russian Urainium Supply

The bill limiting the importation of uranium from Russia into the United States was passed by the US Senate on Tuesday.

The bill was passed by the House of Representatives in December 2023 and is now awaiting President Joe Biden's signature to become law.

However, according to TASS, the US investor said, "I see a clear negative effect for the US economy here, because the search for comparable volumes of enriched uranium will take a lot of time and will entail large transaction costs."

A spokesperson from the White House National Security Council stated in an email to MarketWatch on Wednesday that the bill, which the president is expected to sign into law soon, along with the funding in the fiscal year 2024 budget, will ensure a secure fuel supply chain for the United States.

This decision is seen as a clear message to industry, allies, and partners that the US is committed to establishing a fuel supply chain that is independent of adversarial influence for the long term.

US Nuclear Fuel Capacity

According to Sen. John Barrasso, a Wyoming Republican, the United States spends approximately $1 billion annually on nuclear fuel from Russia. He also claims that President Vladimir Putin used his country's nuclear industry to finance the invasion of Ukraine.

According to Amir Adnani, president and chief executive officer of Uranium Energy Corp, Russia, Kazakhstan, and Uzbekistan are responsible for supplying 50% of the United States' domestic nuclear reactor needs. Additionally, it is important to consider that nuclear power accounts for 20% of the electricity generated in the United States.

The Energy Information Administration (EIA) said Russia ranked third in 2022 as a supplier of uranium to the US, following Canada and Kazakhstan. Russia accounted for 12% of the total uranium purchases made by the U.S. in 2022.

According to the EIA, the United States relies on imported uranium for its nuclear power reactors due to its greater abundance and lower production costs in other countries.