(MENAFN) Global uranium prices have recently surged to their highest level in over a decade and a half, according to data from the COMEX exchange. The remarkable increase in uranium futures for November delivery saw the price per pound reach USD74.5, representing a substantial 55 percent surge since the start of the year.

Several factors are contributing to this dramatic price increase, with geopolitical tensions playing a significant role. The resurgent demand for uranium, a critical resource in nuclear energy production, has been exerting pressure on prices. This heightened interest in nuclear power is largely a response to the diminishing energy supplies from Russia, prompting countries to explore alternative sources of energy.

Adding to the concerns regarding uranium supply, Canadian mining giant Cameco, the world's second-largest uranium producer, has revised its output forecast downward for 2023. This adjustment has further exacerbated supply constraints in the uranium market. Meanwhile, another major producer, France's Orano, is grappling with difficulties following a recent coup in Niger. Notably, Niger contributes 4 percent of the world's uranium output, making it a significant global supplier. With this disruption in production, Europe, in particular, is feeling the pinch, as Niger was the second-largest supplier of uranium to the European Union in the previous year. This disruption has occurred against the backdrop of dwindling Russian energy supplies.

In summary, the surge in uranium prices to their highest point in more than 15 years can be attributed to a complex interplay of factors. Geopolitical tensions and renewed global interest in nuclear energy, driven by the need to diversify energy sources amid declining Russian energy supplies, are key contributors. Furthermore, challenges faced by major uranium producers like Cameco and Orano, coupled with the upheaval in Niger, have placed additional strain on global uranium reserves and supply chains, thereby intensifying the upward pressure on prices.

MENAFN01112023000045015682ID1107349930