Europe’s Russian uranium reliance grows, Sprott says

European reliance on Russian nuclear fuel increased in 2025 despite efforts to diversify its uranium supply after Russia’s invasion of Ukraine, Sprott Asset Management said in a new report this week.

Russian uranium deliveries to EU utilities rose 7%, conversion deliveries rose 9% and uranium enrichment sales gained by 12% last year, Jacob White, director of ETF Product Management wrote in the report titled “On the Cusp of a New Contracting Cycle.”

“European utilities must secure alternative uranium supply and fuel-processing capacity to replace Russian material, increasing competition for production from Western and allied suppliers just as existing contracts begin to roll off,” White said.

Competition for uranium

Kazakhstan, the world’s top uranium producer, will be central to that competition and in 2025 provided 20% of the uranium delivered to EU utilities, White noted. However, a “significant share” of the Central Asian country’s output is already destined for China, Russia and increasingly India under long-term contracts.

The numbers reveal the vulnerability of the West’s nuclear revival as governments turn to atomic power for reliable electricity and greater energy security. But expanding reactor fleets will also require additional Western uranium mining, conversion and enrichment capacity to reduce dependence on Russia.

Russia’s share of European uranium market supply is significant, at 16% overall, 24% of conversion and 23% of enrichment, the report said.

A similar dependence affects the United States, which imports the majority of its uranium needs from Canada, Kazakhstan, Australia and Russia. Kazakhstan supplied 28% of the uranium delivered to U.S. utilities last year.

Contracting conundrum

Through Aug. 10, about 37 million lb. of uranium oxide have been contracted globally for 2026, marking the 14^th consecutive year of utilities signing long-term supply contracts for less uranium than they’re consuming.

That’s due to utilities benefitting from favourable terms in legacy contracts that gave flexible options, permitting them to increase uranium delivery loads. But as legacy contracts expire that supply buffer will go away and annual contracting below consumption levels defers future demand.

“Utilities can defer purchasing, but they cannot shorten the time required to develop a new uranium supply,” White said. “Utilities can return to the market relatively quickly once they decide to purchase. Producers cannot respond on the same timeline,” and their operations take years to bring to production.

But producers aren’t likely to reserve long-term delivery unless contract prices compensate them for development costs, inflation and project risks.

White noted that Cameco (TSX: CCO; NYSE: CCJ), in its July earnings call described the uranium market as still in the early stages of a contracting cycle, though the long-term uranium price is already at $94 per lb., its highest in 18 years.

Broad demand rise

Aside from new reactor construction, another source of uranium demand is existing reactors whose lives have been extended or that have been restarted.

“Uprates will also increase future uranium demand as utilities look to generate more electricity with the current fleet of reactors,” White said.

That trend comes alongside conventional reactors advancing towards operation, especially in China, while India announced in July it plans to spend more than $2 billion on at least five small modular reactors by 2033.

Those developments point to more uranium consumption in the coming years, Sprott said.