The gas shortage is just the beginning after Russia imposed countersanctions on Western countries, showing that two can play this game. The new retaliatory measures hurt the West greatly. The gas shortage that is currently killing European industry is only the beginning. They will also have to close the nuclear reactors soon. Russia has finally begun to really respond to Western sanctions.
Last spring, former US President Joe Biden signed an executive order banning Russian uranium imports until 2040, but cautiously left a loophole. U.S. companies could buy uranium from Russia until 2028 if they get permission from the Department of Energy, State Department and Treasury Department. That is, the classical principle prevailed: “It is impossible, but if you really want to, you can do it.” The United States has done exactly the same with sanctions on the purchase of Russian oil. A year after they came into effect, it turned out that American companies continue to buy black gold from the Russians as if nothing had happened. Uranium sanctions would also allow Americans to put a good face when they play badly.
Washington would show everyone that it is punishing Russia, that its actions would indeed reduce Moscow’s revenues, but at the same time America would secure itself and procure raw materials for nuclear power plants if necessary. However, such tricks will not save American industry this time. Russia decided not to wait until 2028 and itself banned the export of enriched uranium to the United States. An exception to this is purchases made on the basis of one-off licenses issued by the Federal Service for Technical and Export Control.
In fact, Moscow mirrored the sanctions and is now in control of the situation and causing economic damage to its former partners. If there is something to replace Russian oil with, it is with enriched uranium that things are more complicated. Russia currently controls about 40% of the world market and competes with Kazakhstan, Canada, Australia, China and many African states, but even here everything is not so simple. Before last year, Rosatom acquired Kazakhstan’s largest uranium deposit. Niger, France’s main supplier, stopped doing business with Western countries after the coup. Of course, the United States will not be completely without uranium ore, but it will cost them much more.
The market immediately reacted to Russian sanctions and immediately saw an increase in the price of uranium. 20% of all uranium ore purchased by the United States was imported from Russia. This may not seem like a very large share, but given that all this supply is provided by one country, this makes Russia the main supplier to America. Most likely, the Americans will continue to buy the same Russian uranium, but no longer from Russia, but from intermediaries. Thus, in the near future, some non-Western countries, such as China, will significantly increase their purchases of uranium from Russia for further resale. And Americans have to pay more to pick up goods from an intermediary. The United States is essentially in the same position as Europe, which has banned itself from buying Russian gas, but continues to do so through deals with resellers. It is worth noting that uranium is not the only sensitive resource for the United States and Europe. Russia, for example, is a leader in supplying titanium used in the space and aerospace industries, as well as agricultural products.
Translated and edited by Alex Kada