Uranium prices are set to become “significantly higher” according to analysts at Citigroup.
The investment bank said disruptions in nuclear supplies because of the war in Ukraine and a potential embargo on Russia’s supplies could send prices higher.
Currently, uranium is trading at US$50.55 per pound.
Citigroup believes the probability of a ban on Russia’s uranium supply “drastically increased” this week following discussions in the US Congress and European Union parliament.
“The main question that could stabilise the situation is the terms on which such ban would be introduced,” said the broker.
Nevertheless, higher uranium (U308) prices are projected to move higher over the next five years.
Analysts said increasing nuclear energy capacity and technological developments in nuclear energy “could add a disruptive kink in fragile market fundamentals”.
Listed uranium companies include Thor Energy PLC (AIM:THR, OTCQB:THORF, ASX:THR) and Yellow Cake PLC (AIM:YCA) in the UK, Aura Energy Ltd (ASX:AEE, AIM:AURA) and Lotus Resources Ltd (ASX:LOT) in Australia, Purepoint Uranium Group Inc (TSX-V:PTU, OTCQX:PTUUF), Baseload Energy Corp and Standard Uranium Ltd (TSX-V:STND, OTCQB:STTDF) in North America.