Weaponising Energy: The Next Phase of Trade Oppression

It’s time to talk Uranium… The market’s most misunderstood commodity.

You might recall that earlier in the year, headlines about uranium’s opportunity centred on its role in powering AI data centres.

That went quiet after AI stocks peaked in late January and hit turbulence over concerns that ‘big tech’ was overcommitting on its AI build-out.

That’s why I thought I’d spend some time this week unpacking how the uranium market goes much deeper than its speculative AI links.

You see, uranium, the fuel that powers nuclear reactors, offers the ultimate in terms of national energy security.

It’s a safeguard against energy vulnerability.

And that could matter a
lot in the years to come.

We recently witnessed China using critical minerals to pressure the US into backing down on its trade demands.

A clue that we’ve entered a period in which commodities have become tools or what some describe as ‘weapons’ in trade negotiations.

But critical minerals are one matter.

Yet few have realised that there’s nothing more critical than energy.

What happens if coal, oil, and gas are weaponised in future negotiations?

Nations holding energy reserves hold the chips.

It’s an unthinkable scenario for fossil fuel importers across Europe and Asia. But it’s a scenario worth considering as we enter a period in which commodities are increasingly used as tools of coercion.

Revisiting the French Advantage

Earlier this month, the French government released its Energy Strategy Report. It’s not something I’d normally pay much attention to.

Except France offers the playbook for other fossil fuel-starved nations to follow.

Thanks to its decades-long commitment to nuclear, France is becoming the envy of the Western sphere.

The US, UK, Germany, and Japan have all flirted with becoming nuclear powerhouses; except, each country ebbed and flowed in its commitment.

At times, closing reactors in response to poor public sentiment…

Like the Fukushima disaster in 2011.

Or bowing to the global agenda that accepts only wind and solar as legitimate power sources of renewable energy.

The French, on the other hand, have remained committed to nuclear.

And that, in my mind, warrants some serious credit and foresight.

Now it holds the Nuclear Advantage

French energy policy serves as a playbook for other Western countries to follow.

France has demonstrated that a nation lacking natural resources can maintain energy security, thereby reducing its vulnerability to coercive tactics.

As I’ve described before, France has created an energy moat, becoming a net electricity exporter thanks to its long-term commitment to nuclear power.

France is also looking to double down on its ‘nuclear advantage’ and put itself further ahead of its energy-starved European neighbours.

The first step is to extend the operating life of its existing fleet of 57 nuclear reactors by an additional 60 years.

Given the timelines for building new reactors, there’s a clear advantage in retrofitting older facilities.

France is also looking to double down on its nuclear backbone by building 6 additional conventional reactors and leveraging its nuclear experience to develop a stronghold in the emerging SMR (small modular reactor) technology.

France isn’t just idling along with its existing electricity payload and living off the dividends from those former policy-makers who looked ahead…

The country is actively building capacity that will deliver energy for generations to come.

That’s why it offers the playbook for Western nations deprived of adequate energy reserves.

But are there any threats on the horizon?

Yes. France holds an energy moat; a fleet of reactors generating more electricity than the country needs.

However, the FUEL powering the country’s reactors is NOT under its control.

So, what does that mean for France and other countries starting to pivot back to nuclear power as a safeguard against energy vulnerability?

That’s what we’ll unpack in our next edition.

Stay tuned.