Why Uranium Could Be the Next Energy Shock Opportunity

March 28, 2026 | (17 mins 24 secs)

For the latest standardized performance and holdings of Sprott Uranium ETFs, please visit the individual website pages: URNM and URNJ. Past performance is no guarantee of future results.

John Ciampaglia, CEO of Sprott Asset Management, breaks down why tightening uranium supply, surging global demand from countries like India and China, and renewed nuclear policy support could set the stage for a major move in uranium prices. Ciampaglia joins Jimmy Connor of Bloor Street Capital for a lively discussion on the positive prospects for uranium markets and nuclear power. 

Video Transcript

James Connor: John, thank you very much for joining us today. We are living through some very tumultuous times. Aren't you glad you don't trade oil?

John Ciampaglia: Yes, uranium seems like a sea of calm right now compared to some of the other commodities that are getting whipped up by headlines and actions, unfortunately, in the Middle East.

James Connor: We are here to talk about uranium. Despite the volatility we've seen in the energy market and many others, spot uranium has been relatively quiet. It's up a bit year-to-date. But now that we're almost through Q1, how would you characterize the activity we've seen in the last three months in the spot market?

John Ciampaglia: It's been a tumultuous and volatile year for sure. A lot of it's been driven by investor sentiment and by what's going on in the Middle East, along with the uncertainty surrounding it.

But uranium had a strong start to the year. It started at about $81 a pound, briefly touched $100 a pound—which it hadn't been at for almost two years—and, with the commencement of the war in Iran, the prices drifted down into the mid-$80s per pound. We've had a cooling-off period. People have stepped away, derisked and taken money off the table, not really knowing how this is all going to play out.

But I think the longer-term fundamentals remain very intact, and we would argue that this recent energy crisis, no matter how long it lasts, is another positive development for uranium and nuclear energy. This is because you've seen how resilient nuclear energy is compared to oil and gas, which have been severely disrupted worldwide.

This is why I think politicians in the last few years have gone through two energy shocks, and in the last two weeks, we've had the President of the European Union and the German Chancellor publicly acknowledge that closing down nuclear energy was a strategic blunder.

For these two individuals to finally fall on their swords and admit that policy errors were made really highlights that nuclear energy is the perfect offset to the volatility of oil and gas markets, which operate in a more just-in-time framework. Nuclear energy does not have to rely on daily deliveries through pipes or ships to maintain a critical fuel supply.

We've been talking about this for five years, and it is very similar to what happened in the 1970s, when OPEC squeezed the oil market, prompting countries to build nuclear power plants. I think the recent actions in the Gulf will, unfortunately, further galvanize this shift back to nuclear energy, which is ultimately very bullish for uranium.

The uranium market feels constructive. Putting aside all the uncertainties and risks created by the war in Iran, once the dust settles, it seems all parties need an off-ramp here. It appears uranium will return to doing what it does.

We are starting to hear a lot of chatter about uranium utilities; our utilities are returning to the market to buy uranium. We are starting to see some RFPs hit the market. We are hearing that utilities are preparing to return to the market to buy uranium this year.

I would say the most notable announcement we saw was the country of India, their state-owned energy company, making two multi-billion-dollar contract announcements, one with Kazatomprom, one with Cameco, to ensure they have long-term security of supply. I think that sends a very bullish signal: not only are you seeing China buying large amounts of uranium, but now you've got India buying as well. This should signal to the market that everybody needs to get in line to lock down their own supply because these big state-owned entities are doing exactly that.

James Connor: Yes. One other thing I think is very interesting about India. They have 25 reactors, and 3% of their grid comes from nuclear energy, so there's plenty of room for upside.

John Ciampaglia: Yes, it is enormous. When you think about how much electricity per capita India uses, it is still very, very tiny. A lot of people get excited about things like AI data centers, and they should be. But I go back to something very basic. Think about somebody in India who gets their first air conditioner. It's amazing how much electricity those things require. If you think about a population of well over a billion people and only 8% of people have air conditioning, it is astonishing how much things like buying appliances and air conditioners as people accumulate wealth, how much low growth that creates, and this is why developing countries like India are so focused on adding more clean sources of energy. India has pollution and air quality issues, and nuclear power produces zero greenhouse gases.

James Connor: John, I must admit, I'm somewhat surprised by how spot uranium is hanging in here at 85 bucks, give or take. Does that indicate to you that there are buyers out there in the low-$80s? Keeping that price in there? Is that why it hasn't come off?

John Ciampaglia: Yes. The term price, which we haven't discussed at all, is the base reference price that gets escalated for future delivery. It’s $90 right now and has been rising for the past six months. I should point out that $90 per pound is the highest it's been since 2008. That is a very bullish sign and tells you the direction of travel for uranium prices. It's up.

If the spot price drifts too far away from that term price, you'll have participants come in, buy uranium, and basically sell that uranium forward, maybe a year, maybe two years from now, and keep that relationship quite tightly tethered. This is what they call the carry trade: you take advantage of short-term price weakness in the spot market, sell it forward on a very short-term contract, and lock in that spread.

I think this is what's really helped the uranium price stay more cushioned in these downdrafts. Ultimately, this carry trade mechanism is a powerful arbitrage incentive that helps keep those prices from getting too far apart.

James Connor: John, you and your team speak to investors worldwide. What are you hearing from these investors? Are they hanging in there with the trade, or are they getting frustrated?

John Ciampaglia: I think the group of investors that we have are thinking about this in terms of the next three to five years. They're not looking at this in the next three minutes, or three days, or three months. They're viewing this as a thesis that will play out over the next three to five years. This is basically underpinned by the fact that we're not going to have meaningful new uranium supply coming to market over that period.

I should note that two Canadian mining permits for new uranium mines have finally been granted after multi-year review processes. That is very bullish for the industry. Now, there are still risks. There are construction and timeline risks that will have to play out. But many investors believe that without new, meaningful greenfield production coming to market over the next five years, the market will get tighter. Again, these utilities need to buy and lock down uranium many years in advance. We're getting to the point where their uncovered future requirements will start to get big around 2030, right when some of those new mines are expected to come online.

It's going to be a real pivotal development for the nuclear power industry, whether these mines are built on time to start covering those future requirements. Supply discipline remains the main theme from producers. We're still seeing challenges with some existing mines, and no greenfield production of meaningful size is expected to come online over the next three to six years. This all points to a very tight market, which many investors believe will act as a very powerful catalyst to get the price significantly higher.

I should also mention that when you look at the uranium term market, which was very quiet until the last two months of the year, it is indicating much higher future pricing with the price cap. These are like the maximum prices that a utility could pay for future delivery. Now, it's at the $150-a-pound mark. We're even hearing that some producers are offering uranium for future delivery with no price cap. Meaning, if the spot price of uranium is at $200 at the time of delivery, the price is $200.

I think for a lot of utilities, that creates enormous sticker shock and a real sea change, because remember, it was only four or five years ago that utilities could lock in the price of uranium at $30 per pound. Never worry about price caps and price spikes and all the rest of it. It is an evolutionary process in which utilities and producers are playing a game right now, trying to reset the market on where producers are willing to sell uranium.

I think it's fair to say that producers are feeling like they've got more negotiating power than they've had in a decade-plus. They're using that to make these utilities come to them and sign on the dotted line because they know, at the end of the day, utilities will have to buy.

This is the last point I want to make: you cannot substitute or thrift uranium. We hear a lot about copper getting too expensive, so let's go to aluminum, or if silver gets too expensive, let's use copper. There's none of that substitution thrifting effect that can happen in uranium. You have 100% inelastic demand. The producers know this: they know what the future supply and demand look like. Everybody must get in line and lock down their supply. China, India and South Korea are basically doing that right now.

James Connor: John, as we both know, there have been many positives associated with nuclear energy and uranium in the past few years. The U.S. government is going all in on this trade. Last year, four executive orders were issued to expand the use of nuclear power and build out the uranium supply chain. The U.S. wants to build 10 nuclear reactors or start construction before 2030. We also saw uranium added to the critical materials list, and I could go on and on. But you think, with all these positives, we would see a much higher uranium price and, therefore, much higher equities, but we're not. Many investors, especially retail investors, are getting frustrated with this trade. What would you say to these investors?

John Ciampaglia: Yes, this is a very slow-moving industry. You make these announcements about $80 billion of funding in the United States to build new reactors, but there's very little detail. There's very little announcement around who's building them, where and what. I think there's been a lot of very bullish news, indicating a massive shift in policy back toward this technology. But it's going to take time to work out the details and share them publicly. That is going to happen in due course.

I think uranium mining equities have performed well until the last few weeks. Last year, most uranium indexes, including our own, were up 50% to 60%. There was a point when those indexes were up another 50% year-to-date before we had a bit of a risk-off. The Iran war led to a sell-off across many of those companies. But I think the stocks have been more forward-looking and have performed better in response to all these positive news developments.

That's because investors are driving those share valuations, rather than utility fuel buyers, who are moving a bit more on a mixed basis. Some are moving more aggressively, as we talked about. Some are still just getting ready to get back to market to buy. So, very different markets, I think, have very different signals that they send.

But the uranium stocks had almost doubled at one point over a year-plus period. They did perform incredibly well. We've had this correction over the last few weeks, which hopefully represents an interesting buying opportunity once the dust settles in Iran.

James Connor: John, when we look at the next three or four months, are there any relevant catalysts that investors should be aware of that might get the uranium price moving again?

John Ciampaglia: Yes. Clearly, we need an off-ramp in the Gulf. It's creating a massive distraction and disruption. That’s thing one. I think every time we get some news that things might be cooling off, you see an immediate reaction to the valuations of these stocks across many sectors.

In terms of uranium specifically, we need to see more contracting activity in market signals. Last year was very odd, with most uranium contracting happening in the last two months. In our minds, that creates pent-up demand for this year, so let's see if those contracts get signed.

We need more details on these public-private partnerships for building new nuclear energy capacity in the United States. We're seeing a lot of interesting developments on the small modular reactor (SMR) front. Those are going to become more realistic as shovels hit the ground, and that's already happening in places like Ontario.

I would say the last thing is just what's going on in Europe. Are they going to keep pivoting back to nuclear energy? Spain is the last country in Europe still on this path of phasing out what they have. Let's see if this recent energy crisis shifts sentiment in places like Japan, leading them to turn on more reactors that have been off for a very long time.

There are lots of interesting things going on. I think there's a lot of excitement. We need a bit more detail on some of the partnership programs being announced. It will be very interesting to see what roles Japan and South Korea play in some of the buildout in the West. They have track records of building these reactors and supplying all the critical components.

We'll see what happens in Ukraine, which, unfortunately, is now in its fourth-plus year of war, and how that may impact the fuel chain. This is a very headline-driven market, and that's why it's very hard to predict. You just don't know when headlines are going to come out, and the market's going to move on you.

James Connor: John, this has been a great discussion, and I want to thank you for being with us today. As we wrap up, you and your team at Sprott do a great job of producing research focused on nuclear energy and uranium. If investors would like to access that information, where do they have to go?

John Ciampaglia: Yes, please visit our website. Sprott is the world's largest manager of uranium-related investments. We have multiple funds, not just the physical commodity fund we've been talking about, but also several uranium mining ETFs listed in Europe and the U.S.

Please come to our Education and Insights section of the website. We have a lot of great reports, webcasts and podcasts. We discuss investor education on many of these topics on our website. Please start there and reach out to us if you want to talk to us directly.

James Connor: John, once again, thank you.

John Ciampaglia: Thanks for having me.