Last week, the United States authorized the use of American-made long-range missiles by Ukraine in its ongoing conflict with Russia, a move that Russia warns could escalate into a nuclear confrontation in the nearly three-year-long war. In response, the Russian government not only modified its nuclear doctrine but also announced reductions in uranium exports to the United States. However, Moscow did not specify the extent or duration of these cuts.
Given the proxy nature of the conflict in Ukraine between the U.S. and its NATO allies on one side, and Russia on the other, it’s surprising that the U.S. still depends on Russia for 27% of its enriched uranium. Despite this, the uranium spot market responded with a 4% drop in prices. The immediate market reaction is somewhat understandable, as most uranium customers—primarily nuclear power plants—maintain substantial stockpiles and have long-term contracts, so any short-term impact on prices was unlikely. However, the price of uranium mining stocks surged, fueled by anticipation of increased pressure on mining supply outside Russia, the world’s sixth-largest uranium producer.
This development underscores a significant vulnerability for mineral-importing nations worldwide. When the relationship between a major exporter of a critical mineral and its importing partner deteriorates, the consequences can be severe. While exporters may lose some revenue, shortages of essential materials can have profound economic impacts. In the case of uranium, a prolonged shortage could compromise the operation of nuclear power plants and reduce generating capacity.
The U.S. is particularly vulnerable in this regard, as I highlighted in a 2022 article about the federal government’s efforts to enhance U.S. self-sufficiency. The country is heavily dependent on imports of numerous minerals, including nickel, copper, tungsten, cadmium, palladium, aluminum, and silicon. These dependencies show no signs of diminishing.
Globally, China leads in mineral production, with Russia ranking third, and Iran in tenth place. All three countries are becoming increasingly problematic sources of minerals for the U.S. and its allies, especially as sanctions on Russia and Iran take a heavier toll, and tensions with China grow amid the trade war under the Trump administration.
Although the U.S. is second in global mineral production, much of its output is consumed domestically, leaving the nation still heavily reliant on imports, as previously mentioned.
In the wake of the Cold War, the idea emerged that a unified global market would operate smoothly and peacefully. This vision held until the COVID-19 pandemic disrupted global supply chains, and the invasion of Ukraine further strained relations with Russia, resulting in severe trade sanctions. These events have initiated a broad and ongoing shift in global trade patterns, along with a renewed focus on domestic production—not only to bolster job growth but also to reduce dependence on foreign imports.
However, ramping up domestic production can only be effective if a country possesses a substantial endowment of the raw materials required to support its industries. Many Western economies, however, have shifted focus away from production and toward finance. This brings us to a key point I have discussed previously: the global economy’s integration has largely favored those who control finance, allowing them to extract wealth from centralized systems. However, this trend is shifting toward deglobalization, a process that was already in motion due to pandemic-related supply chain disruptions, but which has accelerated with the ongoing Ukraine-Russia war.
Deglobalization will increasingly favor those who control raw materials—the “stuff” that powers industries and sustains daily life—rather than the financial manipulators who have dominated the global system for decades. This shift is evident in Russia’s recent restrictions on uranium exports to the U.S. It’s a clear sign that deglobalization is advancing, and ignoring this shift could lead to economic failure and, in some cases, impoverishment. Just look at Germany, which, after losing access to affordable Russian natural gas due to the war in Ukraine, has been grappling with two years of economic contraction.
The world is changing, and the need for secure access to critical materials has never been more pressing. The question now is whether the U.S. and other Western economies are prepared to navigate a new era marked by resource competition and shifting global alliances.
