U.S. uranium production is climbing from a base so depleted that even a threefold increase leaves the United States reliant on imports for most of its reactor fuel. The industry's collapse was steep: after peaking above 40 million pounds a year in the early 1980s, U.S. output fell to near zero by the 1990s and stayed minimal for decades as low prices and cheap foreign supply made domestic mining uneconomic. According to the U.S. Energy Information Administration (EIA), output rose to 2.1 million pounds in 2025 — the highest level since 2017 — and then reached 2.13 million pounds in the first half of 2026. Second-quarter production increased 4.7% to 1.09 million pounds (EIA quarterly report).

U.S. nuclear-plant operators purchased 46.9 million pounds of uranium in 2025, more than 22 times the amount produced domestically (EIA marketing report). Uranium of U.S. origin accounted for 7% of deliveries, while Canada, Kazakhstan and Australia together supplied 75%. Domestic output, although rising rapidly, still covers only a small fraction of the uranium consumed by U.S. reactors. That reliance on imports has taken on added significance since 2024, when the United States banned imports of Russian-enriched uranium — a move that pushed utilities and Washington to rebuild a domestic fuel supply chain, though Russia's exclusion reshapes enrichment rather than the mining side captured in these production figures.

The higher output has been accompanied by the most intensive drilling and spending campaign in more than a decade. Exploration drilling increased by two-thirds to 1.02 million feet in 2025, and spending on land, drilling, production and reclamation rose 47% to $234.7 million — its highest level since 2014 — according to the EIA's annual production report.

Six facilities produced uranium during the second quarter of 2026: four in Wyoming, one in Texas and one in Utah. Five additional in-situ recovery plants were on standby at the end of last year, while seven proposed plants had a combined planned capacity of 10.5 million pounds. The EIA reported 13.3 million pounds of annual capacity at operating U.S. in-situ recovery plants at the end of 2025, although the domestic industry produced only 2.1 million pounds during the year.

Overall, U.S. utilities expect to require as much as 360 million pounds of uranium through 2035. Existing contracts provide for maximum deliveries of 174 million pounds, leaving 186 million pounds of anticipated requirements without contracts. Utilities already owned 118 million pounds in commercial inventories at the end of 2025 — enough volume for three years of reactor loading at the 2025 rate. Those inventories allow utilities to defer part of their contracting.

Globally, reactor requirements also exceeded primary mine production last year, with inventories and other secondary supplies covering the difference. Mines produced roughly 60,000 tonnes, compared with reactor requirements of approximately 70,000 tonnes. The World Nuclear Association estimates that annual requirements would approach 200,000 tonnes by 2040 under its upper nuclear-growth scenario — but only if reactors are completed on schedule. That demand outlook is being reinforced by plans for new reactor capacity, including projects tied to powering data centers, which have returned nuclear power to utilities' long-term planning in a way not seen since the last U.S. construction wave decades ago.

Why Uranium Stocks Have Retreated

Investors do not appear to be treating U.S. dependence on imported uranium as an immediate earnings event. The Sprott Uranium Miners ETF (URNM) rose to $84.95 on Jan. 29, fell 45% to $46.82 by July 29, and recovered to $56.81 by the end of August. A 3.8% decline on Sept. 1 left the fund about 36% below its January peak, although it was approximately flat for the year.

The broader Global X Uranium ETF traded near $59 in late April, fell below $38 in July and ended August at $45.51, about 23% below its spring high. Cameco, Uranium Energy, NexGen Energy and Denison Mines were all 20% to 35% below their 2026 peaks at the beginning of September, even though several remained positive for the year.

Time is of the essence here. The 186 million pounds of uncovered U.S. requirements are spread across a decade, and utilities hold enough inventory to postpone part of their purchasing. Mining companies — especially smaller developers without operating revenue — need long-term contracts to finance construction now. For investors, the key signals to watch in coming quarters are utility contracting activity, new long-term price benchmarks, and whether the seven proposed in-situ recovery plants move from planning toward construction.

Uranium shares entered this year with fairly high expectations. URNM had more than tripled from its April 2025 low to its January 2026 peak. The rally priced in expectations of higher uranium prices, stronger utility contracting and successful mine development. But operating results did not move at the same pace.

Most uranium does not sell at the current spot price. Long-term contracts accounted for 87% of the uranium delivered to U.S. operators in 2025, at an average price of $55.91 per pound, while spot purchases averaged $76.01. Producers receive prices set by agreements that may have been signed years earlier and can include fixed prices, market adjustments, floors and ceilings. Because of that, higher spot prices reach earnings only gradually.

Still, the latest decline in uranium shares followed a fairly strong August rebound; it was not an uninterrupted sell-off. URNM gained about 16% in August before falling 3.8% on Sept. 1, when higher oil prices and Treasury yields pushed the S&P 500 down 0.7% and the Russell 2000 down 1.2%.

Tripling production is impressive, but it does not mean the United States is materially much closer to uranium independence. Even if output maintained its first-half pace for the rest of this year, domestic facilities would produce little more than 4 million pounds in a market where U.S. reactors recently loaded about 41 million pounds a year.

The uranium market has ample deposits, ambitious developers and growing reactor demand. But they do not have a lot of time.

By Charles Kennedy for Oilprice.com.