Oil over $100 is repricing uranium
The oil price move above US$100 has repriced the world’s energy market just as the Middle East crisis redraws the global energy map — magnifying both the cost and security advantage of uranium.
* with Brent crude moving above $100 during the crisis, oil-fired power fuel costs are roughly $185/MWh, versus about $4.6/MWh for nuclear fuel. That is not a close contest, based on EIA power output per barrel and World Nuclear fuel-cost data
* even with North American Natural Gas far cheaper than crisis-priced oil, Henry Hub at about $3.80/MMBtu still implies gas fuel costs of roughly $26.6/MWh at a 7,000 Btu/kWh heat rate, well above nuclear fuel cost, based on EIA’s latest outlook
The sharp price move in oil has also brought clarity — if any more were needed — to energy supply chain security. So, when it comes to uranium supply for the West, that means Canada’s Athabasca basin.
We don’t know how long the conflict in the Middle East will continue pushing energy prices higher, but that is the point.
This is not a story about uranium suddenly becoming cost-effective. On a fuel-cost basis, it already was (the cost issue with nuclear energy is instead with building the reactors, see below). What the Middle East crisis has done is expose that advantage more clearly by driving fossil fuel prices higher, raising volatility across global energy markets, and increasing the value of fuels that are less exposed to war, shipping disruption, and commodity-price shocks.
